May. 23, 2023
This is a comment for ; File No. S7-10-23 To the commission: This rule is extremely watered down and reeks of filler material and very little substance. Below I will highlight the problems with the proposal along with some simple amendments that could strengthen this idea that had so much potential yet fell by the wayside when you proposed it. First: It is very clear that the market participants that you have had authority over (as you so state in this proposal) have done an atrocious job keeping their risk management models in line with what the commission and public would deem as reasonable and sane. FTX, Signature, SVB, among a list of others that could be named were very poorly managed (by the EMT) as well as poorly REGULATED by the SRO (FINRA) and your regulatory body (SEC). An even better example are poor risk management models at work would be Apex Clearing receiving Billions of dollars in Margin responsibility waived along with Robinhood and other market participants during the 1/28/2021 Gamestop situation (this is literal theft as the products being sold were never purchased, they were waived away as free yet retail still paid money for them. Fraud?) in which your agency provided a report on some of the activities that were disclosed to your teams that investigated. That said, the Clearing houses and other market participants decided that it was in their best interest to remove the retail public's ability to purchase the stock through multiple brokers. It is well documented that there was massive risk associated with the positive price movement (Thomas P. International brokers even went as far as discussing this risk in an interview and stating if retail knew they could recall their shares (DRS) then they would have squoze the other side of the trade.) that GME was experiencing and it is even documented that the "brokerage firm/trading app" Robinhood was not even connected to the LIT Market system (example: NYSE). They were ONLY ROUTING ORDERS TO internalizers (Citadel Securities) and even had trades execute well over $4000 a share (This is theft from all other customers in the market as the same asset is being owned by the customers yet only select platforms are allowing for the trades to execute. The removal of the buy button is not only collusion, it was the extreme lack of RISK management created by the greedy institutions that created the situation in the first place. Blocking retail from trading is not FREE and FAIR nor was it "legal". It is by definition Manipulation that was allowed due to the lack of regulation and complicit actions from the regulators. Again, the position was CREATED by institutions and when retail engaged the risk became a problem? This is a very easy issue to identify as greed. This proposal needs to include a strict process for the RWP that includes strict timelines, public notices that provide transparency, govermentment oversite to eliminate SRO and WS and friends to continue to can kick and collude for their gain and at the expense of all other market participants, Revocation of licenses for all involved executive mgmt and a BAN on participating or working with institutions, funds, or financial products. The process should be created by the SEC and regulated and inspected by the SEC. Again, this has been in your power for a VERY LONG TIME. Secondly, DATA TRANSPARENCY is a must. Allowing third party data to be used also provides a scapegoat when accountability is being looked for. An institution that calls itself smart money should have all of the necessary data needed to hold itself accountable for its actions. There needs to be a massive increase in the amount of data that is collected by regulators and also provided to the public. How did the guys on REDDIT figure out about FTX, SVB before the regulators decided to step in? Is this a risk management failure as well as a lack of regulation and enforcement? YES. SRO's are failing to incentivize a free and fair market. They are incentivized to facilitate and produce an unfair market. Provide the template, guidelines, metrics, etc so that there is a inspectable, regulateable structure that is constantly inspected. The technology exists to eliminate these problems. Decentralization (real decentralization not FTX which was custodial) and blockchain solve so many of these issues at hand. SEC action as well. . BAN PFOF, Punish NAKED SHORTSELLING with jail time and massive fines 2000% the gains made.