Oct. 08, 2022
October 8, 2022
Hello,
I am an individual retail investor. I support the proposed rule 10c-1 Securities Lending Transparency for a number of reasons. First and foremost, any rules which bring greater transparency to our market are imperative if Americans are to retain any trust in this system. The ability to hide transactions (specifically short sales) within the aggregate only benefits large institutions which aim to abuse such an ability. This abuse harms true competition between affected (and non-affected) companies as well as natural price discovery of associated securities.
Additionally, as a retail investor, I will benefit from increased transparency by having more information available to me regarding my investments. Hiding short sales leaves retail investors like me in the dark and unaware of the risks an investment may hold for us.
It is clear the SEC is aware of the risks associated with rampant and abusive short selling. To quote from proposed rule 13f-2, the Commission claims it is ... mindful of concerns that certain short selling activity can be carried out pursuant to potentially elusive or manipulative schemes. For instance, market manipulators may seek to spread false information about an issuer whose stock they sold short in order to profit from a resulting decline in the stocks price. The Commission has previously noted various other forms of manipulation that can be advanced by short sellers to illegally manipulate stock prices, such as bear raids.
A rule like this is clearly in line with the SECs assessment of the risks of short selling, and the greater transparency it offers can only improve the Commissions ability to address such risks and enforce other related rules. The only parties who benefit from striking down this proposed rule are large investing bodies like hedge funds, institutions, and abusive market makers, who can take advantage of decreased transparency to increase their own profits.
In conclusion, I fully support the implementation of proposed rule 10c-1 for the above reasons.
Thank you,
Kevin Howarth