April 20, 2022
The proposed rule SR-NSCC-2022-801 should not be passed. It is damaging to retail and is clearly created to facilitate shorting and bypassing FTDs.
This rule proposes using a vehicle, called an SFT (Securities Financial Transaction) as a placeholder for any securities transaction. The issue here is that if I have 100 SFTs that are shorted, and I want to Fail to Deliver rather than buy-in at the market price, I can resolve this by utilizing another SFT worth the same amount set for the same delivery date.
This blatantly facilitates abusive short selling, which we know is a huge problem in our markets. Shorted stocks MUST be purchased at the market. Using any kind of proxy or work around, such as the proposed rule SR-NSCC-2022-801, allows for shorts to remain short while paying a cost without closing their position and therefore impacting the price.
It is clear as day this rule was created for wall street at the detriment of the retail investor. I am adamantly opposed to this proposed rule and it should not be passed.
Between proposed rules such as this, short and distort schemes, abusive short selling, and a toothless regulatory system, and so many other issues - the US markets are rigged against the retail investor. Retail investors will stop putting their money into a game they know they will lose. Las Vegas has better controls and regulations than the US markets.
Do not pass this proposed bill - it is clear as day this is designed, in part, to protect over extended short sellers with a new mechanism only accessible to private equity. This proposed rule does not facilitate fair and open markets - it provides an additional ruleset for private equity to continue gaming the market at the cost of retail investors, American innovation, and our broader economy.