Apr. 20, 2022
Dear Sir or Madam The market is already convoluted, opaque and unjust, this rule will simply further reinforce those points regarding the market. As a foreign retail investor, the proposition outlined within SR-NSCC-2022-801 is quite abhorrent, as it firstly allow the circumventing of the need to deliver securities, which effectively allows reckless, overleveraged institutions to continue to produce more fail to deliver (FTD's) which is a symptom of bigger problems such as naked shorting, high dark pool usage, ETF and 'Bonafide' market maker share creation abuse. This would effectively allow the hot potatoing of FTD's that are getting passed around rather then settled which consequently causes the buyer of the security to not be given the full security in turn creating massive systematic risks hidden within the market, we already see massive amounts of FTD's within the stock market and bond market which honestly should be dealt with but going back to FTD's it essentially is allowing MM and other institutions to use the cash to further leverage themselves in more bets when they have no intention to deliver the shares . Moreover the establishment of security financial transaction would allow for nefarious collusion as the details would be determined between different parties allowing the borrower to give a very cheap rate to another institutions that has seem to have made its bed but now refuses to lay on it. Although the NSCC says it would oversee and ensure they are following the rules, I doubt as can be proven countless time they shall actually be doing that which would allow for rampant abuse that would undermine the transparency and efficiency of the supposed free and fair market. Secondly, as the NSCC claims that SFT's would help with the mitigation of fire sales as the necessary security can be passed along for cash value rather then the collateral be redeemed in the open market, this is quite a dubious claim as I could foresee SFT giving a heads up onto a sub section of financial institutions involved in the SFTs into which securities are at risk of dropping and value and thus allowing themselves to enter into beneficial positions. This severely undermines the notion of a fair market as these entities would have unfair access to information that others, mainly retail would not have access to in the market. The NSCC would neither regulate or attempt these entities to stop as it would indirectly benefit the NSCC if its members could have unfair information and so therefore I see little to no policing of the proper guidelines by the NSCC as has historically been proven due the the benefits of doing so outweighing the measly punishments. Finally I also don't agree with the ability of existing members being able to sponsor other non NSCC financial institutions for the simple fact that it could potentially be a trojan horse as it would allow financial institutions that shouldn't have access to SFT's being able to access them which could allow for extremely large risky bets to be snuck into the NSCC. The effect of this being disastrous if the bet does not pay off causing huge losses on the NSCC which would be backstopped by the Federal Reserve and consequently the rest of the United States population due to the need to print money to cover the bad bet that the American public would have to pay trough increased inflation. As can be seen throughout the aforementioned points I ask that this purposed rule to NOT be passed and also that similar rules to not be passed nor proposed in the future as we have already seen multiple iterations of these types of rules rejected in the past and will be continued to be rejected if they are brought up again, furthermore the persistent repeated attempts to try to pass this rule after many rejections warrant's an investigation into why the NSCC is so determined to get this proposed rule into the regulation as it seems to only benefit and encourage more careless institutions that evidently undermine the stability of the market in which the SEC is to protect. I would recommend the SEC to create more stringent rules and regulations regarding what these self regulating organisations can do as they seem to be pushing for rules that would only benefit them and their chosen institutions. In this case I repeat to NOT allow this to pass. Sincerely A foreign retail investor who wants a better, free, transparent and fair market that benefits everyone and not the few.