Apr. 20, 2022
Please have it noted here that I fully oppose any proposed remedy that will, in the future or retroactively, make activist short-selling safer for hedge funds or investors in the name of "market stability". This proposed rule is a slap in the face to those investors who for more than a year have pled with the SEC for a fairer market with more transparency, especially as it relates to short selling. If anything, such a policy will only serve to further erode the investors' confidence in the legitimacy of the market, true price discovery, and fair market activity. To insulate only select parties from the consequences of malfeasance or poor judgement is a theft of opportunity from those who at the same time take a counter position of honesty and thrift. By allowing these allegedly equitable swaps to take the place of true settlement and closure, this policy will only encourage future abuse of the already fragile system. Furthermore, it cannot be said that the substitution of one security for another as a means of settlement is of equitable value when true price discovery is being hampered. Even if the securities have the exact same value at the moment, each security represents a distinctly different opportunity. While it will assuredly reduce some volatility, it will only serve as a thumb in the dam allowing a greater house of cards to be built up behind a veil of legitimacy, and when it comes crashing down in the subsequent market failure, the depth and devastation caused by a market built on poor decisions and substitutions will ultimately kill all of the veneer of legitimacy the market has left. Sent from my iPhone