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The original was posted on /r/Superstonk by /u/SatansBoobieTassel on 2023-06-26 06:32:19+00:00.

Dear Securities and Exchange Commission,

I am writing to provide my comments for the proposed rule S7-06-22, which aims to modernize beneficial ownership reporting and enhance transparency and fairness in our financial markets. Comments and requests are as followed,

  • Protecting Shareholder Rights: By granting beneficial ownership only when the underlying security is delivered, the proposed rule can safeguard the interests of existing shareholders and maintains their voting power. This protection is essential to prevent dilution and ensure fair representation.
  • Ensuring Fair and Equal Voting: Opposing the inclusion of derivative holders as beneficial owners maintains fair and equal voting rights for directly registered shareholders. It prevents undue influence from derivative holders who may not have actual ownership of the underlying securities, ensuring that voting rights remain balanced and representative.
  • Accurate Calculation of Ownership: The proposed examination of the delta concept for calculating ownership ensures accurate representation. Ownership should be based on the actual delivery of the underlying security, avoiding potential distortions arising from the inclusion of derivative holders. This accuracy is crucial for maintaining market integrity.
  • Increased Transparency: The proposed rule should enhance transparency by requiring hedge funds to disclose their short positions and activities. This transparency makes it harder for hedge funds to conceal their positions and provides investors with a clearer picture of market dynamics. It ensures that relevant information is accessible to all market participants.
  • Timely Reporting: The rule’s requirement for prompt reporting of short position changes prevents the accumulation of hidden short positions. Timely reporting ensures that investors have access to up-to-date information about market activities, reducing the potential for market manipulation.
  • Enhanced Oversight: The use of structured data, as required by the rule, enables better monitoring of ownership data. This enhanced oversight empowers regulatory bodies to identify potential risks and take appropriate actions to maintain market integrity. It enhances the effectiveness of market surveillance.
  • Deterrence against Market Manipulation: The increased transparency and reporting requirements act as a deterrent against coordinated actions aimed at manipulating stock prices. By discouraging market manipulation tactics employed by certain entities, the proposed rule promotes a more level playing field for all market participants.
  • Level Playing Field: The transparency and accountability fostered by this rule contribute to a fairer market environment. It ensures that all investors have access to relevant information, promoting fair competition and preventing unfair advantages for specific market participants. It supports the principles of equity and fairness.

In conclusion, we should focus on the provisions for protecting shareholder rights, ensuring fair and equal voting, accurate calculation of ownership, increased transparency, timely reporting, enhanced oversight, deterrence against market manipulation, and establishment of a level playing field are vital for the integrity and fairness of our financial markets.

Thank you for your attention to this matter. I trust that you will carefully consider the importance of transparency, fairness, and the preservation of shareholder rights in our financial system.

Sincerely,

SatansBoobieTassel (I used my real name for the email)

I’d like to add a little note as an everyday Canadian, father, tradesman, single father, concerned citizen and investor in today’s markets. Hoping I can pass down some good news and hope for the future to my son. I don’t have a degree in business or finance. I’m not a banker or a hedge fund manager. Yet from what I’ve learned through reading other like minded citizens’ discoveries about how our markets work, it seems a little ridiculous to me that in today’s day and age, settlement can’t be nearly instantaneous. We’ve been slowly proposing faster and faster settlement dates. T+2 T+1 but why not T+0? Why does reporting have to be self reporting? Can’t a system be built where trades are monitored in real time? The technology exists where trades could be monitored by an automated system. There’s no reason why transparency shouldn’t be a built-in part of the infrastructure and not just a pipe dream.

This is no longer a physical system, it’s a digital system. If trades can be conducted at nearly the speed of light then there is absolutely no reason why those trades can’t be monitored in real time for sincerity and validity. It feels like we’re asking Amazon’s shipping algorithms to run the Pony Express.

I implore the SEC to take this into consideration. Sometimes, the only real way to enact meaningful change is to tear a system down and rebuild it from the ground up. Sure it might look scary and sure it might come with some bumps along the road, but we’re fighting for an overall better system for our future. I want my children to be able to trade in a market they have faith in. A system they can trust. The system as we currently see it doesn’t exude trust. Trust is given but only continues with good faith. I can’t help but feel like currently there is no faith.

Please, give us something to believe in.

Thank you