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Eric Ellsworth Comment On Regulatory Notice 21-19

Eric Ellsworth
N/A

Synthetic Short Positions FINRA should require firms to reflect synthetic short positions in their short interest reports daily. Exchange-listed Equity Securities FINRA should publish on the FINRA website short interest data for all equity securities (listed and unlisted) daily. Information on Allocations of Fail-To-Deliver Positions Reporting daily allocations of fail-to-deliver positions to FINRA should be mandatory and include a clause that penalizes firms that do not comply. If they fail to report then they will close all positions within 3-days and forfeit any additional alotted time. Proprietary and Customer Account Categorization Firms should report all positions and an aggregate of retail vs institutional positions should be publicly reported. If an institutions position exceeds a certain percentage that would given them a controlling position in a company then it should be disclosed. This will helo retail investors understand the risk and intention of a insitution that may intend to perform a takeover or canablize a company. Frequency and Timing of Short Interest Position Reporting and Data Dissemination FINRA should consider daily short interest position reporting. Other Short Sale-Related Initiatives Creating a reporting framework around stock lending activity would provide greater transparency. Practices that need transparency and greater regulation Finra should also require public reporting of naked short positions and dark pool data. THe lack of transparency on the items above, synthetic shares, and short interest positions is what led to hedge fund abuse and the manipulation of stock prices.