April 20, 2022
Good day,
I wanted to comment to let you know what I think about this new rule.
This rule effectively creates a darkpool for the short party during a short squeeze or forced share buyback (dividend, recall, etc.)
It allows them to pay their debt in cash, based on daily share price, instead of buying shares on the market, which would increase the share price.
NSCC is recognizing that predatory short attacks are becoming unsustainable, and they want to take the squeeze payout before retail can get it. They're offering to take on the short parties' debt so it can be paid off over years instead of all at once. DTCC/NSCC gets the money, retail gets nothing, and SHFs get to erase billions of dollars in losses overnight.
If enacted, would actively incentivize fraudulent market behavior by opening up a loophole in which covering Failed To Deliver Shares would no longer be reflected in the price of a security. The changes in this proposal can and will be abused by bad actors in an effort to further negate accurate price discovery, to the great detriment of all retail investors.
Best regards.
Ivan Rodriguez, a worried investor.