I'm a retail investor. From my perspective, the entire reason for the (increasingly public) debate over short-selling regulations stems from the loopholes in reporting that are being exploited to the detriment of investors at all levels and to the detriment of the integrity of American markets at large. In this context, I believe the language in this Notice does not go far enough to allay my concerns. ANY instance of effective short positions that can be hidden outside of the framework of reporting regulations, regardless of mechanism/party involved, needs to be forcefully condemned and regulated against. The language needs to be changed to properly reflect this sentiment; specifically, to disincentivize any further attempt to hide short interest through any other mechanism not explicitly defined in this Notice. These abuses must be prevented in their entirety. It is the only way to ensure fairness and stability in our markets. Whenever effective short positions and the associated unlimited risk, synthetic or not, can be hidden from regulatory bodies, the conditions exist for public mistrust at best, and fraud and systemic risk at worst. The penalties for breaking these rules MUST be economically severe enough to prevent the rampant abuse and systemic risk that was on full display in January of 2021. That, to me, means penalties MUST exceed gross profits attained from schemes utilizing ANY form of unreported short position, especially those designed to skirt reporting obligations. Allowing short position abuse/misreporting/dodging to continue in any form displays a clear conflict of interest. As a retail investor, the fact that ANY of these loopholes were overlooked for ANY amount of time is disturbing, given the apparent potential for abuse and systemic instability. In any other professional/corporate setting, the appearance of impropriety IS impropriety. The same standard must apply at the highest levels of the American financial system, where it should CLEARLY matter the most. Fix this. Retail investors are finding effective ways to self-educate and keep informed, in real time. It's fair to assume that they will be watching to see whose interests FINRA really looks out for. Please, don't let them down.
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Anonymous-JV Comment On Regulatory Notice 21-19
I'm a retail investor. From my perspective, the entire reason for the (increasingly public) debate over short-selling regulations stems from the loopholes in reporting that are being exploited to the detriment of investors at all levels and to the detriment of the integrity of American markets at large. In this context, I believe the language in this Notice does not go far enough to allay my concerns. ANY instance of effective short positions that can be hidden outside of the framework of reporting regulations, regardless of mechanism/party involved, needs to be forcefully condemned and regulated against. The language needs to be changed to properly reflect this sentiment; specifically, to disincentivize any further attempt to hide short interest through any other mechanism not explicitly defined in this Notice. These abuses must be prevented in their entirety. It is the only way to ensure fairness and stability in our markets. Whenever effective short positions and the associated unlimited risk, synthetic or not, can be hidden from regulatory bodies, the conditions exist for public mistrust at best, and fraud and systemic risk at worst. The penalties for breaking these rules MUST be economically severe enough to prevent the rampant abuse and systemic risk that was on full display in January of 2021. That, to me, means penalties MUST exceed gross profits attained from schemes utilizing ANY form of unreported short position, especially those designed to skirt reporting obligations. Allowing short position abuse/misreporting/dodging to continue in any form displays a clear conflict of interest. As a retail investor, the fact that ANY of these loopholes were overlooked for ANY amount of time is disturbing, given the apparent potential for abuse and systemic instability. In any other professional/corporate setting, the appearance of impropriety IS impropriety. The same standard must apply at the highest levels of the American financial system, where it should CLEARLY matter the most. Fix this. Retail investors are finding effective ways to self-educate and keep informed, in real time. It's fair to assume that they will be watching to see whose interests FINRA really looks out for. Please, don't let them down.