Retail investors do not typically have much to say during these critical junctures in financial history, but given the recent tumultuous events of the last year, and the potential systematic failures that can be eliminated by 21-19, I felt the need to lend my voice to the effort. Regardless of the viability of short selling as a legitimate investment strategy, the inefficacies introduced by short sale activities reporting have, on numerous occasions, created opportunities for rampant abuse by short sellers. Although the ethics surrounding short selling activities can be a hotly debated topic, short selling abuse has had a historic impact on market price movements. Many older investors may recall the VW short squeeze of the 2008, but the GameStop squeeze of January serves as a much more recent example for this type of negative impacr At the time, had retail investors not been prevented from buying more shares of GameStop stock, the price actions surrounding the short squeeze could have created a major financial recession in the U.S. markets. These issues contribute to a larger issue that surrounds short selling activities: deterioration in the trust in American markets. Short selling activities, without the equivalent reporting measures in places, create inefficiencies in the market. These market inefficiencies prevent foreign investors from entering U.S. markets confidently. Countries around the world, such as Canada and Australia have put strict bans on short selling activities, and, regardless of this particular issue, and the discussions it creates, this breeds trepidation in many foreign investors’ minds before they even decide to enter U.S. markets. Finally, These market inefficiencies prevent retail investors from being able to create educated investment strategies. Retail investors do not typically share the same access to insider information that larger financial institutions have. This leads many retail investors at the mercy and, in turn, subjected to the whims of their larger institutional counterparts. Without an appropriate understanding of institutional short selling activities, and their broader market implications, retail investors are unable to make truly educated decisions in their investment strategies. 21-19 is important because, although it does create burdens on short sale investors, it prevents issues that can prevent growth in the broader market, and empowers many investors, both from home and abroad, to invest in the U.S. market confidently.
David Barocio Comment On Regulatory Notice 21-19
Retail investors do not typically have much to say during these critical junctures in financial history, but given the recent tumultuous events of the last year, and the potential systematic failures that can be eliminated by 21-19, I felt the need to lend my voice to the effort. Regardless of the viability of short selling as a legitimate investment strategy, the inefficacies introduced by short sale activities reporting have, on numerous occasions, created opportunities for rampant abuse by short sellers. Although the ethics surrounding short selling activities can be a hotly debated topic, short selling abuse has had a historic impact on market price movements. Many older investors may recall the VW short squeeze of the 2008, but the GameStop squeeze of January serves as a much more recent example for this type of negative impacr At the time, had retail investors not been prevented from buying more shares of GameStop stock, the price actions surrounding the short squeeze could have created a major financial recession in the U.S. markets. These issues contribute to a larger issue that surrounds short selling activities: deterioration in the trust in American markets. Short selling activities, without the equivalent reporting measures in places, create inefficiencies in the market. These market inefficiencies prevent foreign investors from entering U.S. markets confidently. Countries around the world, such as Canada and Australia have put strict bans on short selling activities, and, regardless of this particular issue, and the discussions it creates, this breeds trepidation in many foreign investors’ minds before they even decide to enter U.S. markets. Finally, These market inefficiencies prevent retail investors from being able to create educated investment strategies. Retail investors do not typically share the same access to insider information that larger financial institutions have. This leads many retail investors at the mercy and, in turn, subjected to the whims of their larger institutional counterparts. Without an appropriate understanding of institutional short selling activities, and their broader market implications, retail investors are unable to make truly educated decisions in their investment strategies. 21-19 is important because, although it does create burdens on short sale investors, it prevents issues that can prevent growth in the broader market, and empowers many investors, both from home and abroad, to invest in the U.S. market confidently.