April 20, 2022
To whom this may concern,
Thank you for allowing comments on SR-NSCC-2022-003. It is important that the regulatory oversight to our financial markets receive public discourse.
SR-NSCC-2022-003 is a blatant attempt at getting around the rules defined within 17 CFR 242.203. 17 CFR 242.203 clearly states that all Failure-to-Delivers (also known as naked shorts) whereas the security is listed on the \"threshold\" list by any authorized participant, broker, or dealer must be cleared before another short sale order is to be placed in the offending security \"until the participant closes out the fail to deliver position by purchasing securities of like kind and quantity.\" In no capacity does the law allow for cash equivalent (as SR-NSCC-2022-003 is attempting to allow through the SFT Clearing Service) to be utilized with a \"promise\" that they will clear this failure-to-deliver at some future date. The SFT Clearing Service is a clear attempt by the NSCC and the DTCC to prevent being liable themselves, and holding the biggest financial bag in history, for their archaic security settlement system that has allowed for brokers to enter into naked short positions. These short positions are extremely detrimental to the stability of our financial markets as they have unlimited risk and is it imperative that the SEC rejects yet another attempt by the NSCC/DTCC to forgo failure-to-deliver obligations detailed in 17 CFR 242.203. 17. The liquidity offered by the NSCC through this rule proposal will continue to illegally prevent US companies from raising capital through our capital markets by diluting their shares outstanding with even more shorts backed by cash and a vague promise.
The only solution that the SEC should be considering here is an immediate buyback of all failure-to-delivers on any security that needs the liquidity to prevent a short squeeze. Any further rule proposals that continue to kick the obligations required by law should be denied. The law is extremely clear here and must be enforced.
Our capital markets deserve to be free and transparent. No more rule changes to satisfy poor financial bets by brokers and hedge funds. Retail deserves to have a fair shake.