Apr. 09, 2021
Dear U.S. Securities and Exchange Commission: I am a 34 year old American citizen originally from the State of New York, a current strategy consultant based in Boston, MA, a recent graduate & researcher at the Yale School of Public Health, Yale Law School & The MacMillan Center for International Studies, the son of a former financial advisor of over 25 years, and an informed retail investor who would like to express his opinion on rule SR-NSCC-2021-801 - a long overdue and sorely needed piece of regulatory oversight that would restore a fundamental baseline of transparency to our markets. At this moment, far from being the envy of the world, our stock market is undergoing a crisis of confidence, much of which is the result of practices directly or indirectly related to abusive short selling of securities. Though this has been an ongoing problem for decades, I strongly believe that abusive short selling poses a systemic risk to our financial system - the type that’s liable to accelerate an already rapidly growing sense of unease and disintegrated trust in our markets, both domestically and internationally. I’m personally of the opinion that you know this already, and that this is the very reason why SR-NSCC-2021-801 has been proposed. I hope you consider its swift approval. As a strategy consultant for budding & forward thinking healthcare & life sciences companies, I’ve seen firsthand how precious and difficult it is to foster true innovation that brings returns to both shareholders and society at large. Unfortunately, countless numbers of publicly traded companies have been, metaphorically speaking, “kneecapped” over the years in having their stock price unfairly, and often mysteriously (at the time) “tanked” by market forces seemingly outside of anyone’s control. What the first few months of 2021 has taught retail investors, is that this previously unquestioned state of affairs is not natural, and it most certainly is not ethical. It is abusive short selling short; out-in-the-open market manipulation meant to provoke short term retail investor panic and long term loss of confidence in what are otherwise decently or even excellently-run publicly traded companies. Worse, these practices are compounded by unmatched algorithmic trading power, untold amounts of risky leverage, and perhaps most importantly to this discussion, a knowing reliance upon naked shorting tactics involving supercharged borrowing, large sums of fail-to-delivers, widespread ETF shorting, exemptions in reporting of darkpool trading numbers, and most significantly, strategically induced asymmetries of information among all parties on essential indicators of short position - namely short interest. Simply put, I believe SR-NSCC-2021-801 is a phenomenally timely, well-thought out, and necessary addition to modern SEC regulatory oversight activities. An update to the RegSho close out requirements, and the switch over to daily (rather than monthly) settlement is indeed progress. I, and many of my colleagues (particularly those who work and/or have done research in applied economics & finance, mainly within the context of health, environmental, and social policy) strongly support this measure, and we trust that the SEC will step in to do the right thing in ensuring the long term stability, trust, and fairness of the American stock market and system of free enterprise. With more people than ever having become passionate and proud retail investors excited about their future prospects, and more willing than ever to educate themselves about the market, more eyes than ever are rested directly upon the issue of abusive short selling. Again, I urge you to approve SR-NSCC-2021-801 at the earliest time allowable. Thank you for your time and consideration. I and many others appreciate the work you do in ensuring more free and transparent markets. Sincerely -Zacharia Postle-