Skip to main content

Denis Blois Comment On Regulatory Notice 21-19

Denis Blois
N/A

In regards for comments on 21-19 regarding short positions, here are my thoughts. * Every share should be tracked with unique identifier and should have the ability to be marked as lent out, unassigned/free, owned-lendable, or owned-not-lendable and be registered with a single central database to prevent duplication/ falsification of data. The ability to mark a share as owned-not-lendable shall only be set by the entity owning the shares and not by market makers and shall only be removed upon that share being sold or changed by the share owner. Under such a system audits should be able to be done weekly at minimum. * Every share should be located and lent only once. * Pentalties for naked shorting, synthetic shares, fails to deliver, etc. should not be a built in cost of doing business, the current fine structure as is is laughable at best. It should be at the very least be significant enough to be a true deterrent, like license suspension or fines that are based on +150% of share price x shares traded x time period. * Every short position should be updated with FINRA daily, retail investors can not make informed decisions about short interest if its updated monthly or even weekly. * Payment for Order Flow is a detriment to trading as it presents a conflict of interest. Re-routing most retail trades to dark pools and only allowing trades to go to lit markets when it benefits the market maker is a form of direct manipulation of the market. * Market makers and hedge funds should not be run by the same company * FTDs should be reported daily, not twice a month, maybe weekly at minimum. * Naked shorting is already illegal, thus fines should not be punishment, license suspension or jail time should be required.