Dec. 19, 2021
File number S7-18-21
Securities lending allows the multiplication of shares in circulation, it is a complex system of fraud towards the long investor, When brokers lend the shares that are held to retail investors, for example, it is equivalent to replacing the shares bought and paid for by a promissory note. The future securities lending is a way of exerting more than 100% pressure on an action to lower its price, making it a "safe bet" and obtaining quick profits towards the fraudsters of companies, violating the free market. Also, a failure to deliver (FTD) that is "closed" with a borrowed stock is not actually closed: it leaves that promissory note open with the lender, what happens if you cannot return the shares, creating an excess of failure to deliver (FTD ) as we have already seen and are currently seeing in some cases. Thus, securities lending hurts the market with little efficiency by inflating the number of shares in circulation, which hinders the real price by artificially increasing supply vs. demand.
In no other industry where anything of value is loaned without a due date for its return. Why is Securities Lending Different? Of course, none of this would be a problem if brokers and banks kept track of the stocks they lent. Nothing in this The proposed rule solves the problem that voting rights and payments instead of dividends continue to be assigned in completely "suspicious" processes for investors, who in the end are the first to lose, but the last to know what happened to their shareholder rights, keeping them blind I have ignorant of the information, which in these times should be transparent , since the investor paid for those rights.
This proposed rule enables and perpetuates ongoing systemic problems as it continues the long history of mistakes that investors have to pay for.
Securities lending reform should include:
- Make public about who is borrowing and lending shares, as well as who buys them are public, we seek equality.
- Notify retail investors with "street name" shares that their shares are being lent. SEC must adopt a more consistent interest in regulating, monitoring and enforcing the rules that brokers require to maintain accurate property records, this is a problem that the SEC has always had and the only solution is to fine these corporations with minuscule fines, which encourages to continue with this practice as it is a profitable business and fines are easy to pay.
- Require that all loans have an expiration date (not only "if applicable"), remember that they are "loans" and have a legitimate owner.
The Dodd-Frank Act directed the SEC to seek transparency for brokers, distributors and Investors, let us abide by this law for a better future.
Thank you for reading me and giving me the opportunity to express my concerns, they are in my prayers.