Apr. 20, 2022
This rule change is the absolute anti-thesis of a fair and transparent market. The sponsors for this rule at the NSCC are asking the SEC to assist in their illegal naked shorting activities. This rule would enable avoidance of true market price discovery through onward lending. It also removes the infinite risk of naked shorting entirely, and in so doing the deterrent of engaging in what is supposed to be very risky and ILLEGAL business practice. It's all upside for market makers which excessively naked short securities, and all downside for those on the wrong side of their shorting which would constitute retail traders, the very people the SEC is supposed to protect. This rule is the opposite of creating a fair market and dumps all risk onto retail, allowing naked shorts to obfuscate and dilute their risk while profiting greatly off the backs of pioneering companies and small investors. There is no need for this rule. FTDs are already "reset" through a variety of methods such as using swaps and other derivatives. I suggest the SEC focus their attention on forcing the NSCC to deliver shares on pain of criminal prosecution and banning dark pool abuse. It is outrageous that rules like this are still being proposed that only favor reckless institutions after the events of January 2021. Please consider the words of retail investors and prevent this rule change.