Apr. 22, 2022
Hello. As a retail investor, I am extremely concerned about the implications of passing this proposed rule. For example, Rule 58 - Limitations on Liability (pg. 150) states that the NSCC is not responsible for misreported or otherwise inaccurate data. This makes no sense - for a year, retail investors have been calling for greater transparency regarding shares held in dark pools, brokerage accounts, etc. and to this date, such transparency has yet to materialize. How many shares of a company exist in the dark pools at any given time? Retail certainly doesn't know this information. Does the DTC? Does the SEC? Is this not the reason why the market is currently struggling with its significant FTD problem? Given this, what is to stop the same abuse from happening with the proposed SFTs? What is to stop one member from borrowing an SFT share, selling it to an SFT lender, upon which the SFT lender turns that into another SFT to lend to another borrower? The NSCC clearly understands that this is a likely outcome, given that the above clause has been inserted that conveniently shields them from any accountability. In conclusion, this proposal is extremely dangerous to the free and fair markets that our country supposedly has. By creating a vehicle that allows shares to change hands without passing through the lit markets, this completely derails the idea of price discovery on any stock - especially since there is nothing included in this proposal that would prevent an institution with 'good' credit from taking advantage for their own benefit. Withdraw this rule immediately. Regards, Jay