April 22, 2022
I actually think most companies should remain private and never look for funds in the \"public\" markets, if this rule passes. Essentially, it removes the very essence of the stock market, and replaces it by a simple casino.
All interest in such a market is lost. By permitting distressed or abusive short sales to become persistent failures to deliver through another layer of obfuscation, that is to say, turning a short sale from a transaction type into it's own variety of fungible asset, this is creating a similar layer of risk as the original derivatives market. This not only incentivizes abusive and reckless practices among investors (read: hedge managers/hedge funds), it actually disincentivizes traditional and retail investment as the tools available to those with the greatest amounts of capital to manipulate asset class prices (from actual equity products through derivatives, and now SFTs) and \"attack\" businesses regardless of their technical fundamentals or the risk profile of the institutions investing in or against them. Without a balancing factor requiring that market actors actually hold the risk of loss inherent to the short sale transaction type, it's like playing musical chairs with Pandora and blindfolds not only does the music never stop, but even if it does, no one knows if the chairs are even in the room.
This policy is reckless at best and active encouragement of financial crime at worst. This measure, if passed, would permit those with the most power in the market today to evade any and all consequences for their bad deals, wrong calls, or outright illegal actions - moreso than they already have. While today it often takes forensic accounting to prove wrongdoing by large hedge funds, if this were to pass it would move into the realm of needing a fortune teller or other divination specialist.