Apr. 20, 2022
In addition to my comments regarding rule SR-NSCC-2022-801 posted to the SEC comments site, I wanted to make further comments regarding claims of fire sale mitigation. First I would like to reiterate that I am staunchly opposed to SR-NSCC-2022-003 and the SFT clearing service. Regarding the supposed benefits of, "fire sale mitigation". They state, "NSCC believes that broadening the scope of central clearing at NSCC to SFTs would also reduce the potential for market disruption from fire sales." Following this statement they warn that shortsellers who default can lead to liquidation of long held securities causing share depreciation and market volatility for bystanders as well as the shortselling institutions. Essentially, because of their bad gamble long term investors with similar holdings will be punished, and they don't believe that should be allowed. What is ridiculous about this is the audacity of these SROs to admit (what in my personal opinion) is negligent risk analysis / control and they are threatening everyone else that if they are allowed to fail on their bad speculation, that it will impact the economy as a whole. They are in essence telling us our options are either: to allow them to continue increasing the risk by can kicking Failure to Delivers and open naked shorts; or allow them to fail, but their failure is so grossly negligent (in my personal opinion) that it could hurt the market as a whole. Somehow we're supposed to believe the better option is to allow this to continue? Our market is diseased because of rules such as these. SEC help defend us: the American public, the retail investors. DO NOT PASS SR-NSCC-2022-003 or its various iterations. -- Matthew Reddoch