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Jonathan Martel Comment On Regulatory Notice 21-19

Jonathan Martel

With all due respect, your current rules are useless and are easily ignored and/or side-stepped. There is no transparency in the sector concerning shorts. Numbers are self-reported and easily manipulated, hidden, or misrepresented. Without mandated, accurate, and daily transparency of short data, the entire stock market is subject to malfeasance. The retail investor, as well as institutional investors are at a severe disadvantage without transparency concerning short positions established on a daily basis. Furthermore, the rules concerning a stock placed on the short sale restriction list are completely inadequate and are frequently ignored. If a stock is shorted down 10% of it's value, and it's placed on tbe SSR list, no further shorting of the stock should be allowed for the current and following trading day, at all. Allowing shorting to continue only on upticks is easily manipulated by high-speed trading or completely ignored altogether. It renders the rule completely ineffectual. This must be remedied. Finally, any rule is only as useful as it's enforcement. Lack of oversight, accountability, and significant penalty does not make for effective enforcement. Penalty should be assessed on a per share basis and not a per occurrence basis. For example, a penalty of $10k for misreporting shorts or naked shorting or whatever impropriety involving shorts is inconsequential to an entity trading in millions of shares a day. A penalty of $500 or $1k per share would be more effective at deterrence. Smaller entities caught for malfeasance would feel the effects but not destroyed by such a penalty. It is a proportional penalty. An entity caught misrepresenting 20 shares will pay a significantly lower penalty than an entity misrepresenting 200k shares. However, since an entity misrepresenting 20 shares would most likely be smaller than an entity misrepresenting 200k shares, the penalty is proportional and appropriate. Thank you for the opportunity to voice my thoughts. My hope is that they are heard and acted upon in efforts to make our stock market fair for everyone on every level of investing.