April 20, 2022
This is my first response to a financial rule proposal. I am a 'part-time' retail investor and so would like to preface by adding that I have tried (to the best of my ability) to digest and formulate an appropriate response.
First and foremost, I would like to address the formatting of the proposal. The SEC staff (both past and current) have expressed great interest in the general public voicing their opinions by commenting on proposed Rulemaking. How can 'the average Joe retail investor' take the time to comprehend the legalese wording these proposals are formatted in? If the SEC relies on comments from the general public, shouldn't SEC do it's part to help who cannot understand the intricacies of the stock market? I would suggest more digestible proposals that can be deciphered by those not versed in financial jargon.
From my perspective, proposed rule SR-NSCC-2022-801 seems to exacerbate a glaring problem with the stock market today. Being able to comfortably short (sometimes 'naked') a stock, into a state where fail-to-delivers are due seems an issue enough. With this proposed rule, these shorting entities will given additional time and leeway to prolong their obligation through SRT's, adding another layer of ambiguity between the hardworking retail investors and the financial elite of WallSt.
I can see no benefit to myself, an average retail investor and would NOT be in favour of this rule being implemented. Bad actors shorting a companies stock should pay up - not be given another vehicle to bury their obligations. To quote from the proposal, \"In addition to creating capital efficiency opportunities for market participants, NSCC believes that broadening the scope of central clearing at NSCC to SFTs would also reduce the potential for market disruption from fire sales.\". Fire sales created by whom? Removing price discovery in specific situations created by excessive shorting SHOULD disrupt the market. 'Naked' shorting is illegal yet is something discussed openly now in media and various online social platforms. How can anyone possible deny the existence of 'naked' shorting when certain stocks held over 100% of their entire float shorted? Hold these parties accountable for their losses and do not allow them the benefit of another means to delay the inevitable. Risk should have been managed better on the side of shorters.
I am a retail investor and I am NOT in favour of SR-NSCC-2022-801 being implemented.
Thank you for your time.