Oct. 31, 2022
October 31, 2022 A key to stable and effective markets is true Transparency. Many larger industry representatives push back on any and all reporting requirements, constantly citing the onerous burden of and costly compliance regarding record keeping and other reporting elements required. With the technology available to even smaller firms today, these requirements do not place any undue burden on these market participants and well serve all other market participants by increasing transparency and creating an industry expectation that techniques used to bury date are less effective. Essentially: mis-marking positions, intentional or accidental time delay in reporting, and other violations of good faith in reporting investment activities (especially short sales based equities activity) are not the building blocks of a trusted, effective, and transparent market system, but build distrust and serve dissuade investors of many kinds from participating in the markets - robbing the markets of increased capital, and investors of the possible prosperity of well functio ning markets. These reporting requirements must be placed on institutions, funds, brokerages, market makers etc to ensure the needed transparency to encourage healthy growth of markets as a whole and the wealth of the public of the Untied States. Data Completeness RE Short Positions Accurate data regarding short position total exposure through derivatives, swaps, ETF creation and any other instruments/activities capable of effectively shorting a given security. Transparency in regards a firms true short position is incredibly important in maintaining fair and transparent markets. Failure to include derivatives, ETF creation, and swap based net or effective short positions will create an industry favored hiding place to put high risk, misrepresented, or even illegally held positions. This effective loop hole must be closed. The proposed Hedging Indicator A true hedging indicator must be more detailed than simply hedged, partially hedged, or hedged. Using a raw numerical or percentage based scale is far more useful and transparent than vague or incomplete basic phrases as proposed. Accuracy and disambiguation are incredibly important in using real metrics to enforce market transparency. Use of Bona Fide Market Making Privileges Any time a Bona Fide Market Maker is using the designated privileges there of, this action MUST be reported in conjunction with the nature of the position (long, short). These actions without such a distinction can again be used to manipulate, distract or disinform regulatory agencies, other market participants and investors. However, I do believe that these privileges themselves represent an exception and loophole that itself presents more opportunities and incentives for unfairness, and obfuscation. If this privilege is revoked entirely it creates an equitable playing field for larger and smaller market participants where locate requirements (and the ability to waive them) do not dictate whether a firm or individual investor can compete with others for advantageous pricing or even to allow some more nefarious actors to skirt various regulations. Thank you.