April 20, 2022
I am a retail investor who is particularly concerned about the central clearing of SFTs. Adding this as a service does not serve the investing public, as it reduces market transparency and provides more avoidance opportunities, particularly for hedge funds who can access this service, to those who have made irresponsible investments in the market. Not only does it allow for potential can kicking of current failures to deliver, but it also reduces the risk parties carry on their books via netted balance sheets. This enables a system where parties are able to increase the risk of their positions, safer from capital requirement restrictions, and potentially can kick responsibility of ever closing a losing short position indefinitely. This fundamentally undermines the assumptions of a fair market, and I ask that you immediately rescind this proposal.