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Steven Thiakos Comment On Regulatory Notice 21-19

Steven Thiakos

Section C: "...short interest reports could be due by 6:00 p.m. ET one business day after the designated reporting settlement date..." In this statement, it's the data that is fixed but the frequency is dynamic. For example, if there's no short sale for 2 days then there will be a reporting gap. Consider that the reporting frequency be fixed but the content be dynamic. A daily report due at 6PM ET reflecting the day's short activity where short sale transactions are in a certain state: 1. EXECUTED - executed on that day and has begun settlement 2. SETTLEMENT - executed on a prior day and is in settlement 3. COMPLETED - completed settlement 4. CANCELLED - cancelled for some reason and is no longer pending settlement. (An empty report indicates no short sales were executed) This affords the following benefits: 1. You can study the settlement process/success for short sales, including duration in settlement and cancellation frequency. 2. It shows the number of current, outstanding transactions regarding short sales. 3. Ensuring negative activity (Cancelled, Empty Report) disambiguates from not having submitted the information. If you have another similar system for reporting general transactions, consider mimicking that process but indicate that this submission is for shares sold short. This process can work for aggregate data as well and is not necessary to be on a per-transaction basis. Regarding Naked Short selling: Consider adding another field indicating how many of these were shorted naked (as is allowed for Market Makers). This indicator can be related to the FTD data to help determine ability to deliver (see my recommendation on Section D) Section D Current REG SHO has the concept of Short Exempt. I believe the current format was done for backwards compatibility (ShortShares - ShortExempt = Actual Short). Consider revising this with your new reports to indicate that ShortShares are really TotalShortShares. Consider adding an indicator of the original intent of the transactions - whether it was executed as "Intended for bonafide market making" or not. This will help inform future rule-making and regulations on how to proceed with this exemption, and may even help with discovery of enforcement. And lastly: Please ensure this data publicly available in a timely manner. I really feel that retail investors appreciate this willingness to improve the process and transparency. Thank you.