Apr. 24, 2022
To whom it may concern, In regard to the proposed changes contained within SR-NSCC-2022-003, I am gravely concerned to see this proposal re-emerging following the previous two withdrawals. As noted in the proposal itself, it would introduce a vehicle and mechanics that would-: Allow “market participants to reduce the amount of regulatory capital they must hold against SFTs under “supplementary leverage ratio and other requirements.” Significantly reduce the capital requirements, below Basel III levels and allow the beneficiaries of the proposal to be subject instead to the NSCC counterparty risk weight of 2% The intention is as transparent as it is shameful, to abuse the NSCC and its membership to circumvent regulatory safety measures that are intended to protect our financial markets, and its investors. the complexity of rules that govern our fail - im sorry, i mean - fair market, are not created by retail (investors), but rather by Wall Street, big banks, and Hedge funds, and they use the complexity to their advantage. This rule is just another example of leveraging complexity to fleece over retail by keeping them ignorant. You can break this proposal down to: "We are going to naked short. If we can't locate, instead of FTD we are going to create a temporary IOU and when the time comes, if we can't locate again we are going to create another IOU to replace the original IOU and keep getting away with our scam." What this proposal wants to achieve is to extend borrows and make it easier to dodge FTDs (failure to delivers) and regSHO. Rules concerning FTDs and regSHO are there for a reason (which SEC may have forgotten, but still), and this proposal will reduce transparency and increase financial instability due to market makers and hedge funds colluding to workaround the rules for reporting and continuing to increase their risky highly leveraged bets. Im fed up with all this shit. You guys at the SEC didnt stop naked shorting for good. ANd now they want to keep "improving" it and get away with all their shenanigans. This is more and more a market becoming unhinged from reality. Where FTDs are not punished and not even having to buy in AFTER regsho FTD is pure fraud. You would create a second-hand market of non-existing "locates" with no value at all into perpuity. This has to be stopped. I could never imagine the SEC being on board with such a mob-rule, taking every responsability/price discovery out of the marketplace. If market participants are struggling to meet their regulatory capital requirements, they should re-balance their portfolio like anyone else. Not create new off-ramps through these farcical proposals; further introducing risk into the market because they failed to maintain their adherence to requirements (which we know are there for good reason). Further to the point, the Basel III output of the “Committee on Banking Supervision in response to the financial crisis of 2007 – 2009” was intended to be adhered to by 2015 but has been pushed back repeatedly and is now set for Jan 1st 2023. The brazen disrespect shown by this proposal that - after several years of compromise in the form of delay, to ensure participants could be fit for the new regulatory environment - the NSCC should be used as vehicle to escape a portion of the obligations before they ever come into effect is infuriating and lacking in moral character. To pass this proposal would be to make a mockery of the NSCC, light of the events of 2007 – 2009 and an affront to the U.S. markets. Be better. Kind regards