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  #1  
Old 01-28-2018,
AdelineCar AdelineCar is offline
 
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The SEC has refused to implement and enforce Section 17A of the 1934 Securities Exchange Act ‚€“ which requires prompt clearing and settlement of trades, including transfer of record ownership, as well as a linked clearing and settlement system ‚€“ even though investors are harmed by the current de-linked scheme, as well as the pandemic delivery failures evidenced in the FOIA data. This flies in the face of investor protection and the notion of fair and safe markets.
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  #2  
Old 01-28-2018,
AdellDiede AdellDiede is offline
 
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Section 17A of the Securities Exchange Act of 1934 states that, ‚€œThe prompt and accurate clearance and settlement of securities transactions, including the transfer of record ownership...are necessary for the protection of investors‚€¶‚€ and Section 36 of the same Act states clearly that SEC exemptions are only allowed, ‚€œ‚€¶to the extent that such exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors‚€¶‚€.

In plain English, prompt delivery (settlement) is required, and the only exemptions allowed are those that protect investors.
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  #3  
Old 01-29-2018,
AdelePeter AdelePeter is offline
 
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The SEC has provided securities and options market makers exemptions from reasonable delivery, enabling them to fail to deliver securities they sell, without limit, and without any requirement to eventually deliver.

The logic behind this SEC rule is to allow market makers to create liquidity ‚€“ ignoring that bona fide market making doesn‚€™t entail selling without delivering for days, weeks or months at a time.
The options market maker exemption enables options market makers to hedge their risk exposure and provide liquidity in the options markets. However, left unsaid is that the market maker‚€™s cost to hedge their sale of put options is transferred from those speculating in options, and imposed upon unsuspecting equity investors. This directly harms equity investors, and sacrifices the integrity of the equities market for liquidity in the options market. This is the antithesis of investor protection ‚€“ and is something the SEC is not empowered to do. Market makers enjoy more profitable trading, but equity investors pay for it, with uncontrolled dilution and delivery failures, resulting in lower share prices. There is no reason for this exemption other than to support options trading at the expense of equities investors ‚€“ and that flies in the face of Sections 36 and 17A of the 1934 Securities Exchange Act.
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  #4  
Old 01-30-2018,
AdelaideMa AdelaideMa is offline
 
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The NCANS letter describes in detail the deficiencies of the current regulatory scheme as it relates to exemptions for certain classes of participants from reasonable delivery rules. It also highlights the damage caused by the ongoing unregulated creation of securities entitlements, as well as the SEC‚€™s failure to observe the requirement that clearance and settlement be linked; the inequity created by a lack of any transparency for short interest and delivery failures; the lack of any meaningful penalties for violation of prompt delivery requirements; and a general refusal by the SEC to uphold Section 17A‚€™s requirement for prompt clearance and settlement of all trades, including transfer of record ownership.
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  #5  
Old 01-30-2018,
AdelaideCh AdelaideCh is offline
 
Join Date: Jun 2017
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Also alarming is that the SEC has engaged in a campaign of deception, wherein it obfuscates the true extent of the naked shorting/failure to deliver problem by using misleading or incomplete data. This sort of dishonesty from a regulator chartered with protecting investors is unforgivable, and must end. Investors in the US markets deserve accurate and timely reporting of material information, including short interest, and failure to delivers, in the companies they invest in. Monthly short interest reporting, two weeks out of date, is inadequate. Zero reporting of delivery failures is inadequate. The markets must have transparency so that investors are not dependant upon a regulator‚€™s assurances that all is well, when FOIA data conclusively demonstrates those assurances are false and misleading.
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  #6  
Old 02-01-2018,
AdelaBatte AdelaBatte is offline
 
Join Date: Apr 2017
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Petition Demands

This petition seeks the following clear, achievable actions by the SEC:

1. Enforcement of all provisions of Section 17A of the 1934 Securities Exchange Act

2. The elimination of any exemptions the SEC has granted that harm investors and that violate Section 36 of the 1934 Securities Exchange Act - including exemptions for market makers that allow delivery failures

3. An end to grandfathering delivery failures. Immediate revocation of the grandfather exemption and a buy in of all grandfathered delivery failures

4. Universal delivery requirements for all, without exception

5. Universal buy-in requirements for clearing agents when delivery failures do occur

6. Universal pre-borrow requirement for all short sales
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