April 9, 2021
To Whom It May Concern:
Thank you for taking the time today to read through the following comments and suggestions regarding SR-NSCC-2021-801.
The intent of this regulatory document to act as a safeguard against dissolution of the Corporation in the event of a participatory members default, is further strengthened by means of the proposed changes.
In its current form (not considering the proposed changes), the regulation (rule) provides nefarious participants with the timeframe to operate in a manner contrary to good order and function, which places the Corporation at unacceptable risk, and the time for which to cover-up their operations before the Corporation would've otherwise noticed.
This is unacceptable.
The allowance of or ignorance to such operations places millions at risk of financial ruin, compromises the integrity of the US Financial System, and destroys trust on an international scale. In the case of SR-NSCC-2021-801, the current approved regulation provides several blind-spots that an individual set to maximize their profits at any and all costs, can and most likely will, take advantage of.
For instance, a 30-day reporting period/period of assessment, gives a devious market participant 29 days to take advantage of a window of opportunity to operate outside of law of regulation, and still have enough time to find creative ways to cover their tracks. Or a market participant could leverage themselves in such a manner that any negative deviation in the value of an underlying asset in excess of a tight margin could place others at risk, all before the Corporation conducts their monthly audit where it would be discovered.
There is just too much room for error.
The current proposed revision is a step in the right direction, as it reduces the chance of this exploitative practice and increases the chance that the Corporation can identify risk(s) in a timely manner, initiate appropriate countermeasures through daily assessments for liquidity obligation assignments, and mitigate the impact from risky behavior of any Unaffiliated Member, or Affiliated Family and their members.
I've attached a .docx Word document containing this text and a few suggestions, revisions, and justifications. I ask for favorable consideration when reviewing and ask that where appropriate, you accept and approve.
I don't know if the wording of this document is intentionally obstructive to free flow of speech, but some attention on that overall would have a positive as well as a clearly directive effect.
At the end of the day, it is incumbent on the regulators and the drafters of regulation to appropriately corral the behavior of market participants, as we as, protect the organizations that the system is dependent on to properly function.
The NSCC and the DTCC are facing immeasurable potential risk from some Unaffiliated and Affiliated Families and its members who are very likely to be engaged in fraud and market manipulation.
I believe the latest rounds of revision are in direct response to investigations that revealed that several companies, Market Makers and other Institutional firms have operated in such a nefarious manner that the integrity of the entire system is at risk of collapse.
In an environment where FTDs very likely outnumber Outstanding Shares and eclipse the float, we all lose. The shareholders lose due to the dilution, the clearing agencies lose because of deferred liability and obligation, and the U.S. loses its credibility abroad due to the perception of ineptitude.
A continued and unwavering effort is necessary to attempt to curtail such rampant activity and regulations such as this become weapons against the belligerents who exploit loopholes in the system and essentially defraud investors.
Thank you for your time and I hope that your continued efforts prove successful at combatting the foolish and destructive behavior of current and future violators of Free Trade.
Very humbly,
Silence Dogood
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