April 24, 2022
It appears that NSCC-2022-003 would have terrible consequences on the market.
The rule change suggests that an overexposed hedge fund would be able to significantly reduce the risk profile of an already made risky play and future dangerous plays.
I do not see how this benefits anyone or any agency participating in the market. The essence of a fire sale is that after the sale, the price recovers. The solution to reducing risks on a risky play is not making the play.
The last thing the market needs is making naked shorting and naked selling more prevalent. I urge all those reviewing the decision not to move forward with NSCC-2022-003 for the market's health, retail participants, and future investment in the markets.