Subject: File No. S7-08-22
From: Lex Stultz

March 13, 2022

I think it's a great first step in creating greater transparency in the market, but I would like to see it go even further. I would think a blockchain-ran system with T-0 delivery would be even more helpful in creating confidence for regular investors, especially if transactions are available on a public ledger.

I understand it doesn't fall under the power of the SEC but seeing criminal charges proposed for violators of these reporting rules would also be a terrific step forward. I think history has shown us that fines are simply viewed as a necessary cost of doing business, and done little to deter large institutions from incorrect reporting, particularly when existing fines require no culpability to be admitted when accepted.

The inherent conflict of interest that exists for a market maker to internalize orders in a private dark pool while also being responsible for a profound number of retail orders (looking at Citadel or Virtu) also needs more severity to be adequately addressed. While being able to open and close short positions within a month-long time frame, (which unless I misread the proposal, would NOT require reporting because the gross short position would not exist at the end of the month) still allows for the discrete manipulation of these short positions. Especially if there are creative ways of hedging allowed, like marrying calls and puts, or even as simple as shares incorrectly marked long when short. In short, steeper penalties for violations are needed to truly deter the type of behaviour that is actually damaging to capital creation and investor confidence.

Thank you for reading.