Apr. 20, 2022
To whom it may concern, With regard to the SR-NSCC-2022-003 filing, I fundamentally disagree with what this proposed rule will facilitate. It allows the premise of failure to delivers to continue to be prevalent within the US financial system. As an international investor I am very aggrieved investing in your markets knowing that these practices not only exist but there are new rules being proposed even today to aid these through loopholes introduced. This is beyond bad for a fair and transparent market. Rather than buy-ins at market value this rule encourages failure to deliver proliferation through the purchase of SFT contracts allowing for the delivery obligation to be reset ad infinitum. This is a dangerous precedent. A firm should not be able to short a security and then when delivery of that security comes due avoid this through the purchase of one of these contracts instead to cover. Enforced buy-ins and elimination of these loopholes would see a fairer system for retail investors and stop institutional level abuse of the system through shorting and then failing to deliver said securities when obligations come due (especially if there is no reasonable locate on these shares and/or they have been illegally shorted naked). This rule would also create a loophole in allowing the cost of a SFT contract to be much cheaper than a market buy-in of a security, especially during times of extreme volatility. Creating this loophole seems to encourage the practice of abusive short selling by creating a safety net for the firms involved when these trades don’t work out for them. Instead, if a firm has been irresponsible enough to make a bad bet, the potentially infinite risk should be realized and the entity should be allowed to fail as is a ‘free and fair’ market for all. I hereby strongly oppose this rule to be implemented. Samuel S. Burns