Subject: S7-18-21: WebForm Comments from Jack Dylanne
From: Jack Dylanne
Affiliation: Grant writer

Aug. 16, 2022


August 16, 2022

 I believe this rule would benefit the vast majority of retail investors and public companies, whose investments and stock, respectively, are frequently the targets of predatory short selling. Under the current regime, there is little transparency and far too much room for serial shortsellers to operate in the dark, which stifles true price discovery and takes advantage of retail orders.

Short selling should not be a tool to lower the price of stock, as the SEC well knows it is, but rather a public stance on the viability of an investment. Current rules allow more protection for short sellers than long investors, to the point that short selling and stock lending can be and are used to manipulate prices lower to what short sellers believe are fair value, instead of what the free market believes are fair value.

Additionally, the degree of exposure short sellers can accumulate under current rules has led to extreme volatility and inefficient markets, as seen in early 2021. I believe this rule (S7-18-21) would help inhibit short selling activity that leads to problems like that, and would be a great step towards the SECs stated goals of facilitating fair and efficient markets, as well as more balanced capital formation (in this  case for traditional long investors and public companies that actually provide value to society, as opposed to short sellers toward which the current rules are largely skewed).