April 20, 2022
As an overseas retail investor this proposed rule change does not seem to make the US markets more efficient, transparent and fair. It seems to propose a way for large funds, banks etc who have either lent or borrowed securities, usually to quite simple bet against a companies future, short, to roll over or bow out of any obligation to close that short when the bet ends up going sour.
Lets not beat around the bush, the US market is already heavily weighted to supporting the short side and also the high frequency trade side where the current complexity is leveraged to skim fractions of pennies via arbitrage.
Going short and losing that bet is the risk you take. If you default then the risk goes to the lender to close and so on. The resultant fire sale is a natural consequence of larger entities making bad bets. The removal of this natural process via more complexity and allowing bad actors to go on making bad bets infinitely erodes the foundation of trust in what should be fair markets. Which would stop my interest, and Im sure many others, in investing in the US in the future. No one wants to play a chumps game.
My vote is no to this proposed rule change.
Sincerely,
Marcus Bain.