Aug. 16, 2022
August 16, 2022 I am writing from the perspective of a retail investor but I also work in the financial planning industry. From both of these POVs the underbelly of securities lending has been a point of concern. Investment wholesalers always praise securities lending as a practice because, according to them in my conversations, lending revenues one way or another add value back into investors accounts. I always ask the question to those brokers/wholesalers, well how do I know that the security your lending is not being sold short in excess by the borrower and respective borrowers in the whole market? - thus effecting their overall return and offsetting any value added from lending revenue. I am always met with some aggregate data set of the amount of revenue they made for investors with securities lending. I am never given or able to find data on a transaction to transaction basis to verify my question and ensure myself and clients long securities are not being sold short in excess by my custodian s borrower and the whole sum of borrowers of that security in the market. Myself and many retail investors I deal with on a daily basis are fed up with the lack of transparency, universally, around their own securities being lent out. I am commenting to voice my support for proposed Rule 10c-1 as it would help fix this issue of transparency around securities lending I(and many) are having. It is very important to me, and retail investors, that this ruling is established as intended, meaning: requiring reporting on a transaction to transaction/15-minute basis for all long and SHORT borrowing. If not brokers/wholesalers will continue to hid within the aggerate, I will not get the answer to my specific question stated above, and economic fragility will persist with long, untracked lending chains. By no means do I feel that brokers reporting expenses should be put in front of our(retail investors) needs for transparent/open markets - especially with the amount of short selling abuse ma de visible over the past 2-3 years. I truly hope you take this constructive comment from a retail investor, instead of having companies like Citadel/Fidelity and their lawyers comment on our(retail investors) behalf in their comments over this ruling. This is what retail wants, transparent-open markets - I and others should have the right to know where, when, and how our own securities are being lent on a transaction to transaction basis. I should also have the ability to hold my broker accountable and I can not do such with the current reporting requirements on securities lending. Please take this productive step in opening up transparency in markets with Proposed Rule 10c-1.