Jul. 29, 2023
As an individual investor, I am in full support of S7-32-10. SEC Proposal S7-32-10 aims to enhance market fairness and transparency, thereby creating a level playing field for all participants. This proposal is beneficial for a fair and transparent market due to its focus on increasing disclosure requirements and improving investor protection. By doing so, it fosters greater confidence among investors, reduces information asymmetry, and prevents fraudulent activities. Here are three real-life past examples that illustrate how this proposal could have benefited the market: •Enron Scandal (2001): The Enron scandal was one of the largest corporate fraud cases in history. Enron manipulated its financial statements and concealed its debts, leading to misleading information for investors and regulators. The SEC proposal would have required stricter reporting and auditing standards, potentially exposing Enron's fraudulent practices earlier and protecting investors from significant losses. •Subprime Mortgage Crisis (2007-2008): During the subprime mortgage crisis, financial institutions packaged risky mortgages into complex securities and sold them without adequate disclosure of their true risk. Investors were unaware of the underlying assets' quality, leading to severe market disruptions. The SEC proposal's emphasis on increased transparency and disclosure would have compelled these institutions to provide clearer information about the underlying assets, helping investors make more informed decisions and mitigating the severity of the crisis. •Flash Crash (2010): In the 2010 Flash Crash, the U.S. stock market experienced a sudden and severe drop in prices, followed by a quick recovery within minutes. The incident was exacerbated by high-frequency trading algorithms and lack of clear market oversight. The SEC proposal's implementation would have introduced stricter regulations for algorithmic trading and increased market surveillance, reducing the likelihood of such sudden and extreme market fluctuations. In conclusion, SEC Proposal S7-32-10 plays a crucial role in promoting fair and transparent markets by enhancing disclosure requirements, improving investor protection, and reducing the potential for market manipulation and fraud. Drawing from past examples like the Enron scandal, the subprime mortgage crisis, and the Flash Crash, it becomes evident that this proposal would have benefited investors, instilling greater confidence and stability in the financial markets.