FINRA 21-19 is a long overdue change. It is clear that the integrity of the United States market has been strained to the edge of disaster, in large part due to systemic risk developed under the regulatory authority of FINRA's outdated short interest reporting policy. While many of the policies mentioned in Regulatory Notice 21-19 address the general breadth of exploitable and ineffective reporting, they also leave significant specific gaps that could compromise the entirety of 21-19's purpose. It is critical for the restoration of both the stability of the US markets and the confidence of the investors within it that any and all regulation changes regarding short interest reporting be effective in every known circumstance where effective short positions, synthetic or not, can go unaccounted for for any length of time greater than any other short position reporting deadline. Additionally, the cost of operations necessary for applicable market members to accommodate these standards cannot be reasonably compared to the cost of a compromised market with systemic risk or the loss of investor confidence and participation in the US economy. -Loan Obligations Resulting From Arranged Financing: Broker-dealers can lend internally to close a short position and create a loan instead. FINRA is ~considering~ regulating this. FINRA MUST be held accountable to treat a defined intra-member SI-defeat mechanism the same way it would treat its effective position: a synthetic short. This dichotomy must not be allowed to coexist alongside "synthetic SI reporting improvements. " Additionally, it should be made illegal to use synthetic short positions to facilitate the closure of another synthetic short position. -Frequency and Timing of Short Interest Position Reporting and Data Dissemination: Shorten reporting timeframe from bi-monthly to weekly OR daily. Shorten dissemination deadline to (implied 6:00ET T+1) independent of reporting timeframe. The difference between one week and one day is huge. Clearly one day is the better option for reporting, and even this still puts short data t+2 of settlement. I think we should ask for complete dissemination 6:00ET next day, minimum. -Information on Allocations of Fail-to-Deliver Positions: report daily granulated FTD's automatically rather than waiting for FINRA inquiry, including trade date and T+n obligation. This is a significant step forward for regulatory ability as long as it does not override current public dissemination of aggregate FTD's per security. However, given reporting will be done on a daily basis regardless the quantity of FTD's, it stands reason that public dissemination of aggregate FTD's should ALSO be done on a daily basis rather than the current bi-monthly. I think there is a good argument to be made that any security on the threshold list, given "complete" SI reporting of all effective short positions, should be subject to daily granular FTD dissemination in addition to aggregate. I have been investing in US markets for over 10 years and since the GameStop incident took place in January I closed all my positions and invested the funds in the UK and Australia. There are thousands of investors in my position. The US markets are rigged and unless you do something to hold the Wall Street parasites accountable, capital investments will be invested overseas.
Anonymous-BB Comment On Regulatory Notice 21-19
FINRA 21-19 is a long overdue change. It is clear that the integrity of the United States market has been strained to the edge of disaster, in large part due to systemic risk developed under the regulatory authority of FINRA's outdated short interest reporting policy. While many of the policies mentioned in Regulatory Notice 21-19 address the general breadth of exploitable and ineffective reporting, they also leave significant specific gaps that could compromise the entirety of 21-19's purpose. It is critical for the restoration of both the stability of the US markets and the confidence of the investors within it that any and all regulation changes regarding short interest reporting be effective in every known circumstance where effective short positions, synthetic or not, can go unaccounted for for any length of time greater than any other short position reporting deadline. Additionally, the cost of operations necessary for applicable market members to accommodate these standards cannot be reasonably compared to the cost of a compromised market with systemic risk or the loss of investor confidence and participation in the US economy. -Loan Obligations Resulting From Arranged Financing: Broker-dealers can lend internally to close a short position and create a loan instead. FINRA is ~considering~ regulating this. FINRA MUST be held accountable to treat a defined intra-member SI-defeat mechanism the same way it would treat its effective position: a synthetic short. This dichotomy must not be allowed to coexist alongside "synthetic SI reporting improvements. " Additionally, it should be made illegal to use synthetic short positions to facilitate the closure of another synthetic short position. -Frequency and Timing of Short Interest Position Reporting and Data Dissemination: Shorten reporting timeframe from bi-monthly to weekly OR daily. Shorten dissemination deadline to (implied 6:00ET T+1) independent of reporting timeframe. The difference between one week and one day is huge. Clearly one day is the better option for reporting, and even this still puts short data t+2 of settlement. I think we should ask for complete dissemination 6:00ET next day, minimum. -Information on Allocations of Fail-to-Deliver Positions: report daily granulated FTD's automatically rather than waiting for FINRA inquiry, including trade date and T+n obligation. This is a significant step forward for regulatory ability as long as it does not override current public dissemination of aggregate FTD's per security. However, given reporting will be done on a daily basis regardless the quantity of FTD's, it stands reason that public dissemination of aggregate FTD's should ALSO be done on a daily basis rather than the current bi-monthly. I think there is a good argument to be made that any security on the threshold list, given "complete" SI reporting of all effective short positions, should be subject to daily granular FTD dissemination in addition to aggregate. I have been investing in US markets for over 10 years and since the GameStop incident took place in January I closed all my positions and invested the funds in the UK and Australia. There are thousands of investors in my position. The US markets are rigged and unless you do something to hold the Wall Street parasites accountable, capital investments will be invested overseas.