Oct. 08, 2022
October 8, 2022
I would like to come out in favour of this rule for several reasons, among them:
- Individual transactions should be reported _individually_, aggregating reporting into batches does not give an accurate picture of the trades
- Timely reporting is important, in a time when high frequency trading occurs and digital communication is the norm, there should be no reason why the market at large should not have up to the minute information to combat fraud and suspicious market activities
- As a retail investor and non-professional trader I feel the opaqueness of the reporting thus far has only hurt small investors, and not being able to see what is going on with large institutions, when frequently they can see what is going on with small investors such as with Market Makers being able to see Limit orders, does not make for an even playing/trading field
- dark pools and a lack of reporting leads to things like short selling taking place in the dark, and this has historically hurt companies without any real way for them to fight against the financial predators shorting their company. I would not want my government congress/parliament to work secretly in the dark, so why would I want my financial system to?
- short selling is not investing, it is very much the opposite and causes wild volatility with short squeezes and pendulous price swings, reporting this activity will likely cool off the practise of short selling, making it much more risky for large players to do and subsequently stabilizing the market a bit better. I would much rather have rues in favour of market stability over rules in favour of larger profits at the risk of instability.
- As a retail investor I can research my investment fundamentals a lot with online information, but what I can not research right now is the market situation for that investment. How many FTD's does it have, how much short volume is there every day, who is shorting the stock? Some of these metrics are out there but perhaps inaccurate because of lax reporting requirements. There should be very strict penalties for incorrect reporting of market activities like this as small retail investors are the ones without departments full of 'quants' and trading professionals, and individual investors need to have easier and more accurate data to understand not the underlying value of a company, but the underlying behaviour of the stock they want to invest in, as often the two things are wildly different and we need to be able to understand why, which can not be done without timely and accurate reporting of what all traders are doing with the stock in the derivatives world
- We are at a time when an unprecedented number of individuals are watching certain stocks like hawks, never before have so many people been following the goings on of the market, to the degree they can see with the information currently available to the public. This is a GOOD thing, and we need more of it, as the scale of monitoring done by regulatory bodies is obviously lacking. With large funds paying a pittance over and over again for incorrect reporting practises, and often not getting caught for their manipulative trading behaviour, the market would benefit from more eyes on it, and those eyes having clearer and more timely, accurate, data is critical to a more stable and fair market. Social media is no different from a pub in Manhattan where traders go after work to discuss the days events and what is happening in the market and economy overall. We need more social media access to information for the markets, not less, and this rule supports that.
- Share lending being done behind curtains can lead to a lot of re-lent securities, and subsequently a long chain of share-lending exposure which can NOT be good for a market. WHen one share gets lent to one organization which then uses it to lend to another, who then lends that share again, and on and on, there is no clear way to see that chain of exposure and if one of those links fails to find a share to return, the whole chain breaks down. If these lending practises were made more public, individuals would see when a security is very over-lent and trade it accordingly, meaning long chains of unreported/untracked share lending would likely not happen because of the very public risks they would be broadcasting to the market around that stock. Being able to see when a company's shares have been rehypothecated through the lending process and failures to deliver would help mitigate situations like what happened in late January of 2021, and for me having better insight and protection a
s an investor in a company is far more important than allowing for higher returns for a professional trader of a company's stock.
Thank you for listening.