Apr. 19, 2022
I disapprove of this rule in its current form. I think, instead of creating further mechanisms to defer and avoid Failure To Delivers on shorted stocks, the SEC should address the FTD issues at their core and stop allowing market makers to generate “liquidity” out of thin air. The privileges MM’s have to buy on unlit exchanges and sell on lit ones, crack open ETFs to sell its contents, and create synthetic shares for the sake of liquidity is already an incredible advantage. Using this SFT to say $100 of a stock is worth $100 of another would only further separate market prices from reality. If you want to stop FTDs, hold MMs accountable for not delivering shares. If the fine is large enough such that they are disincentivized from generating synthetics for liquidity sake, organic price discovery will occur. Isn’t that the whole point of the market? To be able to invest in companies you believe in? If there is no accurate price discovery, the market cap is inaccurate, and the company is valued improperly through its representation on the ticker. aubrey