April 20, 2022
Rule change SR-NSCC-2022-003 contains rule modifications that appear to have a goal of REDUCING transparency and adding unnecessary complexity to markets in the effort to protect or aid market makers and large institutions that may have difficulty locating shares. Rules should be put in place to level the paying field as much as possible so that all market participants have equal access to information, and equal exposure to upsides and downsides of transactions. It is not the SECs, or any other agencys duty to protect the large market participants any more than their duty to protect the individual investor. The SEC needs to create a market where anyone who chooses to participate, can experience the same opportunity and risk.
Specifically regarding SR-NSCC-2022-003, this rule would encourage market participants who are struggling with short positions, to push this issue farther down the road, rather than holding or closing their positions like they were expected to when they opened their positions. It is evident that the extreme short interest (likely much higher than the actual float of the stock) that is present in multiple popular stocks is not a healthy situation for the organizations/people that are short, but more importantly for the brokers, market makers, and others that have enabled this irresponsible behavior. While market makers have historically provided a service of liquidity creation, there is a limit to their value and we cannot allow market rules that allow them to create liquidity at any cost. That sort of thinking will destabilize the entire US market in the effort to assist a small number of market participants.
We must not allow rules, such as SR-NSCC-2022-003, to be enacted. The fairness of our markets depends on the accountability placed on all participants equally. SR-NSCC-2022-003 removes or reduces accountability and transparency.
I oppose SR-NSCC-2022-003.