Leonidas Georgiou Comment On Regulatory Notice 21-19
Leonidas Georgiou
Software Product Manager
Regarding section D. "Information on Allocations of Fail-to-Deliver Positions" in the sections marked as "Identify of correspondent firm" and "Amount allocated to correspondent firm (number of shares). I believe that what constitutes a "Correspondent firm" and who this refers to exactly need to be more accurately defined in order to avoid misreporting or mismatches between the "Identity of correspondent firm" and "Amount allocated to correspondent firm" Regarding the "Publication of Short Interest for Exchange-listed Equity Securities", this is a welcome change especially from retail traders who have to scrape this data from multiple sources and collate it themselves. Regarding the section "Synthetic Short Position" under "Content of Short Interest Data", synthetic shares made by means of "Married Puts" should be closely monitored as it creates an excess of shares in any case which affect the borrow fee rates across the market for the equities those synthetic shares are being generated for. Married puts are essentially share dilution and it's dilution by an unauthorized participant. The costs to perform this type of dilution are not 1:1 and this should be examined extremely carefully before making any final decisions in regards to synthetic shares via the use of options contracts between 1 or more market participants working alone or together. https://www.reddit.com/r/GME/comments/mgj0j1/the_naked_shorting_scam_revealed_lending_of/ https://www.reddit.com/r/Superstonk/comments/mvdgf5/the_naked_shorting_scam_in_numbers_ai_detection/ Regarding the section "Frequency and Timing of Short Interest Position Reporting and Data Dissemination", this is a welcome addition. In regards to tighter reporting cycles causing less liquidity generated by means of short sales, it is my opinion that tighter reporting cycles be a requirement regardless of effects. In regards to "Synthetic Short Positions" and SWAPS. It is the belief of some reddit retail trading communities that total swaps and married puts are used in order to hide failures to deliver and consequently as an effect to hide Short Interest. The matter of Total Swaps should be looked into extremely carefully by a professional in the matter of swaps. These are currently not being reported because there is no regulatory need for it. Lastly, not having been mentioned here, the fines for misreporting anything should be re-thought from the ground up. There are instances that 97% of all short trades being marked as long in order to bypass the alternative short tick rule (SSR) and the fine for 500 million $ in trades being a meager $10-$150k. This makes FINRA fines to be the cost of doing business rather than de-incentivizing this type of malicious behavior where retail traders and other lose.
Leonidas Georgiou Comment On Regulatory Notice 21-19
Regarding section D. "Information on Allocations of Fail-to-Deliver Positions" in the sections marked as "Identify of correspondent firm" and "Amount allocated to correspondent firm (number of shares). I believe that what constitutes a "Correspondent firm" and who this refers to exactly need to be more accurately defined in order to avoid misreporting or mismatches between the "Identity of correspondent firm" and "Amount allocated to correspondent firm" Regarding the "Publication of Short Interest for Exchange-listed Equity Securities", this is a welcome change especially from retail traders who have to scrape this data from multiple sources and collate it themselves. Regarding the section "Synthetic Short Position" under "Content of Short Interest Data", synthetic shares made by means of "Married Puts" should be closely monitored as it creates an excess of shares in any case which affect the borrow fee rates across the market for the equities those synthetic shares are being generated for. Married puts are essentially share dilution and it's dilution by an unauthorized participant. The costs to perform this type of dilution are not 1:1 and this should be examined extremely carefully before making any final decisions in regards to synthetic shares via the use of options contracts between 1 or more market participants working alone or together. https://www.reddit.com/r/GME/comments/mgj0j1/the_naked_shorting_scam_revealed_lending_of/ https://www.reddit.com/r/Superstonk/comments/mvdgf5/the_naked_shorting_scam_in_numbers_ai_detection/ Regarding the section "Frequency and Timing of Short Interest Position Reporting and Data Dissemination", this is a welcome addition. In regards to tighter reporting cycles causing less liquidity generated by means of short sales, it is my opinion that tighter reporting cycles be a requirement regardless of effects. In regards to "Synthetic Short Positions" and SWAPS. It is the belief of some reddit retail trading communities that total swaps and married puts are used in order to hide failures to deliver and consequently as an effect to hide Short Interest. The matter of Total Swaps should be looked into extremely carefully by a professional in the matter of swaps. These are currently not being reported because there is no regulatory need for it. Lastly, not having been mentioned here, the fines for misreporting anything should be re-thought from the ground up. There are instances that 97% of all short trades being marked as long in order to bypass the alternative short tick rule (SSR) and the fine for 500 million $ in trades being a meager $10-$150k. This makes FINRA fines to be the cost of doing business rather than de-incentivizing this type of malicious behavior where retail traders and other lose.