Apr. 20, 2022
The US Equities and Securities markets are severely lacking in transparency and accountability for large institutions. As an American citizen working >60 hours a week administering HEALTHCARE to my fellow Americans, this rule is an insult and diametrically opposed to my interests. Through onward lending, this rule only further inhibits true price discovery. This rule is seemingly crafted to protect market makers , prime brokers, and banks who place excessively large and risky bets (often naked short selling under a charade of "providing liquidity to markets") from ever being accountable. This removes the "infinite risk" of naked shorting entirely and in doing so removes the major deterrent of what is a risky business practice and illegal for most Americans. The NSCC is attempting to give a pass to members who want to take risk BEYOND what current financial vehicles already allow for. This rule proposes a financial tool that is easily weaponized to effectively create infinite shares of a company through rehypothecation and lending. The markets already have a major problem of FTD's being "reset" and concealed through complex derivatives and swap agreements, tools that are out of reach for the average retail investor; and this will only serve to further the market asymmetry. Reckless institutions have already demonstrated in 2000 and 2008 that they will continue to abuse regulatory loopholes to generate profit, at the cost of the American people. This rule has already been proposed with differing facades because market abusers on Wall Street cannot bear to face the consequences of their poor decision making. The Chair of the SEC Gary Gensler has already confessed that through dark pools and order internalization that true price discovery is absent. Why should professional gamblers be given a backdoor so they can further exploit the American people and the economy we worked so hard to build? In what way does this rule fulfill the vision and stated goals of the SEC? When will the burden of failed "trading strategies" (in reality, fraud and racketeering) committed by Wall Street cease being thrust onto the humble taxpayers of this nation? Furthermore, the timing of this proposal is suspect as it only benefits the aforementioned prime brokerages, banks, market makers, and hedge funds at a time when they have taken enormous risk and it comes home to bite them. How are our financial regulatory organizations any different from the openly corrupt Russian government when they just come up with rules on the fly to get out of trouble they brought upon themselves... and all at the taxpayer's expense. The can cannot be kicked indefinitely, it will eventually disintegrate. This rule is akin to "let them eat cake" to retail investors who are robbed blind. "A substantial number of disconnected and competing liquidations" - this phrase comes up multiple times in various formats throughout this rule proposal. In a free market, participants are indeed disconnected and competing. Competition being the heart and soul of the "free market" as we were taught in sixth grade. Yet the NSCC is proposing that complex derivatives and associated counter party risk (the value of which exceeds QUADRILLIONS of US dollars) should be exempt. This rule proposal suggests the NSCC understands the emergent hazard, but is disinterested in addressing the causes. Rather they suggest increasingly complex financial instruments that only serve to perpetuate and potentiate the problems they are unwilling or incapable of resolving... and all at the cost of the American taxpayer. I am opposed to this rule. At best, this rule demonstrates negligence on behalf of the SEC and NSCC, and at worst collusion and conspiracy with organizations who seek to impoverish the American people for their own gain. I do not have an infinite capacity for labor to support an infinite credit line extended to gambling addicts on Wall street. Please withdraw this rule. Address dark pools, PFOF, internalization of orders, and FAILURE-TO-DELIVERs. Sincerely, A hardworking American taxpayer