Jun. 27, 2023
Dear Securities and Exchange Commission, I write to you as a retail investor who keeps a close watch on the financial markets and regulatory changes that impact them. I appreciate the SEC's initiative to reconsider the currently in-effect beneficial ownership disclosures, as you undertake the process described in File Number S7-06-22, "Modernization of Beneficial Ownership Reporting." Furthermore, I agree with the stance taken by "We The Investors" and their call to bring the disclosure timeframe to a shorter span of two days rather than the present period of ten calendar days. In my opinion, the existing ten-day deadline, established five decades ago in 1968, is outmoded, and it leads to information asymmetry in the market, causing disadvantage to uninformed investors. Thus, aligning the beneficial ownership interest report timing to modern conditions would put all market participants on a more even information landscape. Additionally, the exemption of cash-settled derivatives from disclosure requirements is another area that needs reforms. As recent incidents like Archegos Capital Management have demonstrated, holders of these derivatives can exert significant influence, whilst circumventing the existing regulations. By incorporating cash-settled derivatives into the disclosure mandate, my belief is that this could help avoid a recurrence of situations like Archegos, thereby strengthening the financial market integrity. However, this reform should include clear guidelines that being termed as beneficial owners under this rule would not translate to additional voting rights or controlling powers of the securities referenced for the derivatives. In conclusion, I strongly encourage the SEC to consider reducing the disclosure deadline and broadening the spectrum of derivatives in its review of the beneficial ownership reporting framework. This will help in fostering a more transparent and stable financial market for the benefit of all participants, particularly retail investors. I appreciate the opportunity to express my views, and look forward to seeing these changes implemented for the betterment of the investing community. Thank you, Vsevolod Maltsev