February 18 that the main regulators on Wall Street are considering whether to increase short selling and facilitate such transactions in order to cope with the negative impact of stock frenzy trading caused by the game post incident.
Transparency of profit non-public stock lending. The full text is excerpted as follows:
Eleven years ago, the Securities and Exchange Commission was required to implement such rules, but they have not implemented them.
Now, in response to the negative impact of stock frenzy trading caused by the game station incident, the agency under the new U.S. government is considering increasing the transparency of short selling within its mandate.
The Dodd-Frank Financial Reform Act passed in 2010 required the Securities and Exchange Commission to collect information on how many shares each listed company sold short.
The Securities and Exchange Commission did not collect or publish data on such bets made by specific investors.
House lawmakers plan to review game-post stock trading on Thursday local time and discuss the lack of short selling data, according to a memo released before the hearing.
The memorandum noted that the SEC has not completed the responsibilities under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
It is not clear what specific information the Securities and Exchange Commission will require disclosure.
Any new requirement must be publicized for public comments before being voted by the members of the committee before it can be implemented.
Regulators must now consolidate data from brokers to understand which asset management companies are most vulnerable to game stage shorting.
Short-selling pressure has intensified as many retail investors gathered on the website of Reddy in the United States urged each other to buy these stocks.
The Securities and Exchange Commission has refused to require relevant enterprises and institutions to further disclose short selling, including how many stocks have been loaned.
A provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires the Securities and Exchange Commission to issue provisions to strengthen the disclosure of stock lending information within two years.
Another provision of the law requires the agency to publicly report, at least once a month, on how many shares a company has been shorted.
Some officials of the Securities and Exchange Commission have expressed concern that if large investors have to disclose short positions, other investors may follow suit and flood into such transactions, thus increasing short sellers’ short-selling costs, said a person familiar with the matter.
The Securities and Exchange Commission is now controlled by the Democratic Party and led by Acting Chairman Allison Herron Lee.
Short selling is usually arranged by a brokerage firm, which allows clients to sell shares they do not hold, as long as they can borrow, usually in the form of mutual funds.
The same stock may be loaned multiple times, which may lead to a short selling interest rate of the stock to a fairly high level. Short sellers exit trading and make money if the stock price is lower than the level when they borrowed the stock.
Some investors say that excessive transparency may inhibit trading activities.
This can be useful by bringing stock prices closer to fair value and allowing investors to hedge risk.
The stock lending market is a back office business usually controlled by brokers.
Angel said that the Securities and Exchange Commission may need a new “market display system”, which will publicly report when stocks are borrowed in short and the cost of financing.
The U.S. Securities and Exchange Commission is currently analyzing the game station incident and plans to publicly report on the reasons that drove its stock price up and then plummeted.
The SEC staff will analyze the role of short-makers in the chaos and may recommend policy adjustments, people familiar with the matter said.