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In re S7-27-15 (Transfer Agent Regulations) |
Originator: John Wooten <@JFWooten4>
Discussion: https://github.com/orgs/WhyDRS/discussions/TBD
Status: Draft
live: DATE_TBD # normally the due date per Fed Register if new item
file: S7-27-15
href: SEC_URL # for when submitted
extends: https://www.sec.gov/comments/sr-occ-2024-001/srocc2024001-474471-1355754.pdf 1
thesis: Federal Preemption of Challenges in U.C.C. Article 82
Ms. Vanessa Countryman c/o U.S. Securities and Exchange Commission 100 F Street NE Washington, DC 20549
##File No. SR-DTC-2006-16 https://www.sec.gov/comments/sr-dtc-2006-16/dtc200616-42.pdf "The DTC ... [is] attempting to make... rules... for transfer agent non-members... [who] are direct competitors of DTC." from https://www.reddit.com/r/Superstonk/comments/pw0opj/computershare_is_a_competitor_to_the_dtc_comment/, which probably wont get cited but cool pser
modern context at 13 in File No. SR-DTC-2020-017
https://doi.org/10.21033/pdp-2021-02
We respectfully submit this collaborative letter with the viewpoint that Satoshi Nakamoto is dead. We believe that this perspective shapes the industry’s next options given the sentiments of Dr. Dan Awrey, Esq. and Joshua Macey, Esq.3 Ms. Countryman, given recent public demand for a new transparent trading and settlement system,[^] we respectfully submit this decentralized framework to restore confidence in our most advanced, developed, and liquid capital market.4
Democratization? Somethign big here if fits (no more links in on page / in text)
^ all of n.3(5) should be seperated quotes with links attributable to author name
On unjust delegation of power, esp. During exclusibvely Federal SEC Investivations: https://www.sec.gov/resources-for-investors/investor-alerts-bulletins/ib_dtcfreezes
Drop the report.jfwooten4.com fairly early, ref to sections ...
Concern over oversightful CoI - https://www.quiverquant.com/congresstrading/trade/House-H001072-37
Cannot be Transfer Agent and Broker Dealer, problamatic speeration custody implications "Netting is a function commonly performed by clearing agencies and may also be performed by broker-dealers for customers holding in street name, but is not among the core functions enumerated in Exchange Act Section 3(a)(25) performed by registered transfer agents."
All agree that (i) DTCC is systemically important and needs bailoit (ii) DTCC is on the brink of bailout per eg, GME but via references to Prev (iii) therefore there needs to be a system in place to replace DTCC so that we arent perpetually bailing out the CCPs, the only such system being blockchain. Make the case for using Stellar, a distributed ledger well-known to innovative...staff.
In response to comments by : Former Federal Reserve Chairman Ben Bernanke explained that: "[T]he historical record shows that clearinghouse arrangements have generally withstood even severe crises. This solid performance reflects good planning and sound institutional structures but also some degree of good luck, as crises have also revealed important vulnerabilities, vulnerabilities which prompted subsequent reforms by both the private and public sectors." Good luck is not a strategy, so why can I be confident that Treasury clearinghouses [the FICC] will perform even in times of market stress?
On the SRO structure from PREV: extrapolate this to confer presidentail control over the DTC as a de-facto industry requirement to operate in the transfer agent business for public US compnaies https://supreme.justia.com/cases/federal/us/561/477/ implicate further inadquacies of a "members club", but implicate diction quite lightly
Our rules can serve to increase barriers to entry and entrench large competitors, which leads to market concentration. — Commissioner Hester M. Peirce
Ms. Countryman, as you may recall, this statement was made in response the to rule approved in December last year legalizing the monopoliztion of the Treasury securities clearing and settlement market.5
This development is particularly problamatic because XYZ
We agree with TRES’ poisiton that ""the traasurty market super important yay"". However, we find these recent develop[ments contrary to the public policy objectives trumpteted by recent FTC actions aimed at preventing undue monoplization.6 More to the point, we respectfully submit to the commission that "DIRECT MONPOLY QUOTE FROM RULE talking about lowering interbank credit risk," while well-intentioned, fails to contemplate the alternative deployment of a debit-based diret investor-to-investor trading sstme using distributed ledger technology.
Segway to alternative disintermediation On fdirect link to issuing base configs Express competion on decentralized
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1516911
also see X, "udemy" tho whiteboard, potetnially expand this, Z](https://youtu.be/-cZPoqnRZq4)
"We need to end self-regulation in financial services.
Many law and finance academics have been arguing for an end to this "failed experiment" for a while.
In the US Code, the only industry that has codified self-regulation is financial services... [all other industry groups] are in a sense self-regulated... but it’s not codified. There’s not a law that says they have to [follow SRO rules].^See also notes 16, 21, and 137 in PREV
The problem is self-regulation... The SEC approved what they believed was a rule regarding mandatory buy-ins, which was in fact a rule to eliminate the word mandatory from buy-ins—to make them voluntary. {File No. SR-NYSE-2005-50}
I truly believe we have to get rid of the self-regulatory option in financial services.
{{potential ending quote}} In fact, Bill Denser used to say, "Depository Trust Company: trust is our middle name." If people don’t trust the Depository, then the whole thing falls apart. Which is kind of where we are now, right? We’re at a point where we don’t trust the centralized system. We don’t trust the regulators.
We have corruption in our goverment as much as other couintries have corruption in
We went through all these machinations 20 years ago, and yet here we are today and people are still asking, "What do you think about naked short selling?" Well, I think failures to deliver are the root of your problem. Why short, when you can fail to deliver?
We heard so much about naked short selling 20 years ago, and then here we are today still talking about naked short selling... even if you borrow the shares to deliver for settlement, then you still have created an IOU—you’ve created a phantom share—in the account of the person who loaned the shares out. {{extra phantom shares floating around}}
[L]aw and finance academics have been arguing for an end to this "failed experiment" for a while. — Dr. Susanne Trimbath
https://www.sec.gov/comments/s7-08-08/s70808-318.pdf#page=32 at n.11: n.14 relates to https://www.sec.gov/comments/s7-07-23/s70723-20162302-331156.pdf n.17, 22 relates to https://activityinsight.pace.edu/mbragaalves/intellcont/bb%20mf%202020-1.pdf per https://www.nber.org/system/files/working_papers/w9423/w9423.pdf n. 46 relates to § 4 in https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=3046&context=faculty_scholarship
start with coinbase story as banking frame, footnote suppl on blockfi in re CB futu short
coninue introducing and extending lack of access to service for Syndicate, incl new circle implicatinos story
segway to house (motion to floor) in re note 16 transcript whereby embargo threatened by banking lobby at X in TN transcript pdf
re specifici arg prob just strike the exception in 8.03
which gets extrapolated to dtcc c&s sys
The Depository Trust Company (“DTC”) is the only stock depository in the United States. When DTC provides services as the depository for an issuer’s securities, its securities can trade electronically. Without DTC eligibility, it is almost impossible for a company to establish or maintain an active market for its securities. [Brenda Hamilton, Esq.]](https://www.securitieslawyer101.com/2014/dtc-chill/)
onyl focus on global locks as matter of unappropriated market control
"Reddit's ability to detect bullshit is insanely high.
Standardization is a great way of eliminating the ability to rent-seek.
The internet does a better job of organizing a bunch of individuals than General Motors or Sears does.
The internet does a better job of organizing a bunch of individuals than [corporate names redacted]."
— Gabe Newell (https://youtu.be/Td_PGkfIdIQ) [use also follow up arg: 28:28 https://youtu.be/TbZ3HzvFEto ?t= needed - Late is just a little while; sucks is forever.]
Note 5 avaliable at https://github.com/orgs/WhyDRS/discussions/2#discussioncomment-10537423
On previously conducting blokchcain insights, never returning
On governance, DAO concerns: See documented token distribution quandaries, available at https://docs.house.gov/meetings/BA/BA21/20240910/117620/HHRG-118-BA21-Wstate-HaysM-20240910.pdf#page=11
The spread of blockchains is bad for anyone in the "trust business"—the centralised institutions and bureaucracies, such as banks, clearing houses and government authorities that are deemed sufficiently trustworthy to handle transactions. Even as some banks and governments explore the use of this new technology, others will surely fight it. But given the decline in trust in governments and banks in recent years, a way to create more scrutiny and transparency could be no bad thing. — The Economist
You’ve all seen The Big Short... What went wrong there? It was a lack of transparency in these major mortgage-backed securities frameworks. Well guess what the principle benefit of the blockchain is? A transparent, immutable ledger. We have the solution to that problem. You know the Global Financial Crisis of 2008. That crisis, guess what? Has not been fixed. So, it’s over, we got lucky. But in fact, we took—to fix the problem—what was too big to fail, and we turned it into too bigger to fail. The problem is not better. And, in fact, there’s a huge demand for liquidity; many folks expect that there may be a liquidity crisis in the next year or two. The old financial system cannot fix this. [Centralized trust] very nearly caused our financial system to come down. It is quite possible that, without a replacement... the next problem is worse. And what was a crisis becomes a collapse. — Daniel Doney CEO of Securrency before aquisition by DTCC
https://www.dtcc.com/-/media/Files/pdf/2024/4/26/B20002-24.pdf https://youtu.be/ThV0DTFytxA?t=1195 xyz has states that their goal was to "minimize the number of intermediaries or rent-seekers out there."
Agile is often seen as a chaotic process, but if you've actually engaged in it, it is anything but chaotic; in fact, it determines at every moment what developers should focus on through a rigorous but adaptive process, not willy-nilly.
We tend to say, "we've got this well established process that we used over and over and over again," instead of actually engaging our end users in the process. And not proxies for professional program managers or others—the actual end users in whatever it is that we are looking to do. If you get the end users involved, it does away with the need for a lot of process.
Responding to change over following a plan: this is the thing that I fight [for]—on daily basis—against the bureaucracy. The bureaucracy loves a plan... [the buraucracy believes] we've got to stick to it. Being systematically able to adapt is where you become innovative, and it's where we become efficient as an Agile organization. — Dan Doney
for a period of X years and Y months, Securrency was a transfer agent employing the same blockchain as the Syndicate. -- https://www.sec.gov/edgar/browse/?CIK=1802190 use the early closure of this entity as evidence of corruption, segway potentialyl (VERY POTENTIALLY THIS COULD BE BAD BE VERY CAREFUL---ONE OR TWO WORDS/ADJECTIVES MAX) to the talk above given while he "was the CEO" but appears to be functioning in a governmental position which is associated with an organization not on: https://www.linkedin.com/in/ddoney/details/experience/
vote: https://discord.com/channels/1102309240145707049/1125874036774277363/1286778908909375638
#into DTCC "ditial assets" initiative
https://www.dtcc.com/-/media/WhitePapers/Transforming-Collateral-Management-With-Digital-Assets-JSCC.pdf <-- Link from @tehchives 💜
The PoC focused on modelling how margin calls and their associated processes could be automated, made more efficient and transparent for all participants using digital assets and smart contracts – or rules that automatically execute on a distributed ledger when certain conditions are met.
it is precisely these technologies which obviate the need for the DTCC. harp on the requisite disclosure of marigning algorthms and such as consistent with requests of PREV then spin that b/c obs these mfs aren't going to do that in any meaningful capacity as prospected in their walled gardens
In the case of clients maintaining segregated accounts with their Clearing Member (Client B in the diagram), the JSCC node could directly calculate the portion of the margin call due from the specific buy-side client.
use this as an intro to the ckusterfuck of segregated omnibus account resolution and minupulations thereunder, manipulations which are entirely amelierated when investors themselves hold chain-native assets in their wallets. as in how bitcoin was supposed to be. if we can sincereavly voice such support for these technologies, then might we additionally requisite in a legislative underdone the operational; implications of decentralized direct registration?
these mf'ers are literally using fucking aws at 5. antithical to web3 (okay we need to use words other than antithical, preferailbly that legal jargon version inimical)
need to frame this in both the context of protecting the just 3 goals and institutionalized innovation charades7
this does not look safe
they compare with teh existing system as something that:
"Especially in the listed derivatives market, the unique and complex structure of ‘omnibus’ accounts presents challenges for ecosystem design. Buy-side client data, housed within omnibus accounts, is managed by individual sell-side clearing members and remains hidden from the CCP. This results in a complex market structure with a hierarchy exceeding three layers."
can use this carefully as framing, likely elsewhere
they trhen pose the "solution" that (removing the jargon sensences with no active tense or meaning) posits:
JSCC created a tiered application structure allowing sell-side entities to manage their own omnibus accounts through a UI. However, in this setup, the network owner (the CCP in the POC) had access to all data.
look i can't decode their complete misinterpetation of the chain of custody when managing digital wallets, but let's perhaps contemplate how this might afflict centralized interfacing implications 🤔
Dive into centalizing risk per:
- https://www.sec.gov/newsroom/press-releases/2024-98
- https://www.sec.gov/files/litigation/admin/2024/34-100780.pdf
- https://www.reuters.com/markets/europe/us-treasury-market-braces-overhaul-vote-clearing-looms-2023-12-13/
not sure if here but at some point I need to offer to put the Syndicate into chapter 11 if DTC goes open-source by July i know the notes are somewhere around here most likely, but i haven't gone in to finish a fisrt draft yet lol rip considering breaking it into sections, but i tried that internally and it was just confusing on the ordering
"What the real innovation here is all about is confirmation without a central operator, without a central clearinghouse - that’s really the big technological breakthrough" - https://youtube.com/clip/UgkxtHrLI0lAJELpFBSbyha9XeDFautIoDAZ
On the rehypotecation, refer to 2023 Conunterfeiting Stock SECcomment [fnt-csecX]
Consider remarks _also by him at: https://youtu.be/Fl-L632VuRw?t=90 ^
from an internal webinar that was held for Ukrainian banks, as confirmed by Jordan Edeltein on 13 Sep 2024
Xegway to argument on Ukranian resiliance despite major US enemy adversaty
DTC is not a government agency subject to FOIA requests, despite need per note
Promugulation of private crowdfunding markets under SPVs stop need for publc registration Need to count beneficial holders towards the requirement under Section 12g for public interest Only the natural thing to do since certainly when they invoked the law in XX_1934_XX no SPV8 "SPVs that hold private company securities raise a number of policy questions." https://www.sec.gov/news/press/schapiro-issa-letter-040611.pdf
info re dis-commodification of common stock
the most decentralized you can get is down to the developers, Creators, and community itself https://leighmcculloch.com/talks/starbridge-a-trust-minimized-bridge-between-stellar-and-blockchains/Slides%20and%20Notes.pdf https://github.com/stellar-deprecated/starbridge/tree/main
sorta ties to the CAP process and such, may implicate tips and bips see also https://github.com/stellar/stellar-protocol/tree/master/ecosystem
In discussion of AST breach, mention extrene vciomnminality of email issuances; force sig garuntee!!
-
implicate bip 44 ^ ?
-
stellar/stellar-docs#950 & final sentiments implicated in opening comment href
See https://www.dtcc.com/news/2023/october/19/dtcc-signs-definitive-agreement-to-acquire-securrency-inc Using XLM for Securrency digital assets (now DTCC) and in place for WisdomTree Prime custodial multisig https://www.crypto-news-flash.com/securrency-develops-stellar-xlm-based-marketplace-for-financial-instruments/ SCP: https://www.scs.stanford.edu/~dm/blog/simplified-scp.html
Should refer to genesis tx, src somewhere on creating via payment (?)
[The Network] is not run by Stripe. We just believe that a system with properties like Stellar's should exist in the world, and we heartily encourage anyone interested to participate in its development... we think it's important to invest effort in basic infrastructure when the opportunity arises. If we get things right, life is going to be much better for billions of people. — [Greg Brockman](HREF_CBN: just the stirpe blog psot not https://www.youtube.com/live/h-rr_iA3Qog) He uses qupte from https://www.mercatus.org/research/working-papers/permissionless-innovation-and-immersive-technology
They fostered BTC payments before the network became unusably overloaded https://web.archive.org/web/20170610100924/https://stripe.com/bitcoin
After washing machine age comment, "DTCC still supports Stellar on their tokenization infrastructure. WisdomTree uses that tech, and we're working to support and grow that as well. we're aligned as an organization with DTCC's approach to issuing assets in a regulatory compliant manner." -Dennele Dixon But prob just direct sec ref https://blocktransfer.com/.well-known/thesis.pdf#page=13
CF DAO starting poinits
- https://github.com/opensource-observer/oss-funding/commit/39400491d819b74631155e62731711783e6d7283
- https://github.com/opensource-observer/oss-funding/pull/16/files
- https://github.com/opensource-observer/oss-funding/pull/13/files
implicate the decission makring process deeply embeddedi nthe community for protocol updates https://developers.stellar.org/meetings/2024/01/26 S 2.iii
From 6:57 to 26:44, there was a discussion of the risks associated with an expedited protocol 21 [phase 1](BUG POST) upgrade
- Discussion of Protocol 20 upgrade pre-launch bug, community risk assessment response to "make an informed decision"
need to frame that despite the amterial singlehanding efforts here, we have a collective agreement on the final rulest in the light that anyone can contribute these ongoing efforts (and they do in re SEP efforts decentralization) equally "same playing fieled" dynamic applied to n etwokr partoiciupants and ecosystpart affiliations, introducing prior comps
"we've had two external audits" and "as we've announced, we [the SDF] have an audit bank with six audit companies" "multiple rounds of internal audits in which members of the core team read every line of code introduced" "Software has bugs, blockchains have bugs. We do everythign we possibly can to address these."
in itnroducing the stellar dev foundation, convo should implicate very deeply the community fund and ongoing decentralization efforts, introducing SCF here, and 9
Leading investor concerns: Cite https://www.youtube.com/clip/Ugkx_V1DjK4hfuqgfPeARudw1_efek9tyx-e Cite https://www.sec.gov/files/corpfin/no-action/14a-8/chiocchiogamestop042424-14a8.pdf Cite we the investors big peition
Cite WhyDRS nonprofit DAO On the DAO structure, let’s cite and devulge into our unique gov struct without TA as SRO given Congressional quadary of requesting increased oiwer ofr TAs (cite the Coinbase, Alpine, and Uniswap congressional stuff) https://api.a16zcrypto.com/wp-content/uploads/2022/06/dao-legal-framework-part-1.pdf https://cs251.stanford.edu/lectures/lecture12.pdf#page=25 https://api.a16zcrypto.com/wp-content/uploads/2022/06/dao-legal-framework-part-2.pdf
Possibly on uniswap LP securities v. Protocl-level AMM deposit/withdraw on XLM ^ very carefully do a footnote referencing AMM liquidity via permissionless SDEX as free speech per XYZ § my, n1., and infra ABC or PREV https://cdn.prod.website-files.com/614e11536f66309636c98688/66f41c9c55e13361ed5d3dce_BitcoinProtectionFirstAmendment-Sept-25.pdf
27min - Goal was to give all away within 5 yr per https://lnns.co/WIZL1hN60x-/1555 ^ get that into the actual doc references circa issue #794 present decentralization efforts ongoign in re https://stellar.org/blog/developers/composable-data-platform and reply to stellar/stellar-protocol#1504 § 2.1.2
On network holesitically (incl. values alignment per SDEX blog post possible infra interleaving protocol discussion)
I have selected the Stellar n etwork after extensive diligence (into public blockchains?). It is our present opinion (prob sregnthen this) that the network (or blockchain here) is best adopted for the trading and settlement of our great National market system (maybe caps thisand href hot NMS>?), despite certain industry sentiments.10
Do commenters believe the introduction of certain alternatives to the current central securities depository model, such as a modified transfer agent depository, could be beneficial to issuers, securityholders, and/or the National C&S System? Why or why not? Could it co-exist with the current central depository system? Why or why not? What would such a modified depository entail or look like?
Real problem with the centralization of capital, specifically in SPVs investing in private companies which allow these firms to raise signficiacnt funds from the investing public without requiring registration on Form 10 under the number of shareholders prong, as other commenters have pointed out. Argument ot follow: MUST classify beneficial owners as shareholders since they are the ones actually benefitting from the increased corporate disclosures. Cite examples in Reg A singe entity or "pre-IPO" leading to lack of disclosures and centralized gatekeepiong of top investment opportuntiies, only passing off to hte public once signficantly matured. Not far to our great nation’s hardworking citizens
Elaborating from BTC approval process:
yatta yatta, available at https://www.sec.gov/newsroom/speeches-statements/crenshaw-statement-spot-bitcoin-011023#_ftn5 -- also say support oversight in note 25 (which btx is NOT HAPPENING GIVEN MISSING DATA AND OBFUSCATED POSITIONS IMO PER investor side and missing infor incorporating some of the materials but prob not direct link to https://dollarendgame.substack.com/p/return-of-the-kitty?r=3bnvyi and then clearly use off-edxhcnage from https://www.sec.gov/comments/s7-32-10/s73210-20120936-273059.pdf) "Concentration of ownership... [leaves investors] vulnerable to the whims and trading practices of a few." "This concentration may impact price movements in unpredictable ways. Investors have few resources to learn about and price these risks." LIKE THE FUCKING BROKERS
"Spot bitcoin ETPs will be participating in an unregulated, fragmented, continuously traded, global free-for-all. Even if there were a primary regulator for this market, much of it could be beyond the reach of U.S. regulation. Thus, even if the Commission or exchanges were to identify specific fraud and manipulation there might be little to no recourse for investors."
Can fix this through binding abritration Probably align with them on sceptacism about btc [explicitly document btc trade to raw doc without affiliate info, host on jfwooten4 site]
Express sentiments of paying rent with short profits per https://www.linkedin.com/pulse/from-trader-trailblazer-web3-stock-investments-sec-review-john-wooten-zvxbc/ — Commissioner Caroline A. Crenshaw
Decentralized governance small footnore saorta oversight on sdex etc per last post on tad3-and- https://www.mercatus.org/system/files/Thierer-Permissionless-revised.pdf at 77. Challenge of legacy system for otherwise explicit onchain terms through smart contracts, e.g. https://web.archive.org/web/20180223062554/http://jedmccaleb.com/blog/my-settlement-victory-with-ripple/
As a note to this, we can extrapolate form existing precident for beneficial disclosure and equivalent application of law in the treatment of introducing clients in the case of undue affiliation (see s7-15-23 144 section, note on newspaper guy), 15c2-11(b)(5)(i)(P) "directly or indirectly", and one other example somewhere - potentially on 17 CFR § 240.14a-7(2)(i) (DIRECT ECONOMIC BURDEN PRECIDENT ON ISSUERS): we thus must block transfer of investment assets from main st to wall et etc This fundamental software freedom enables the next generation of computerized, decentralized, and permissionless innovation. It gives masses of people the necessary tools to build real savings and retirements. ^ let's try to Confer "fuck wall st" in a comment note comparing CSD regime (in re bailoit convo/section?) with debit-based market txns (IDEALLY REFERENCE GENSLER DIRECT or at least the quot in re MIT show Q&A on why not change the stock makret lol - could be a very important quote) would be even better with some _supra_s
draw hard parallels to communism,-
"The world has changed; the plan no longer applies... I'm a keen fan of crowdsourcing." Dan Doney in supra Vid XXk3QKOeKvU
Intro commenting on very good yay previous exective regulatory flexabiulity agenda items, actions, and impact
Federal Preemption of Challenges in U.C.C. Article 8 (UCC 8 Review & Transfer Agent SRO) Do not think it requires a material change in regulatoryu framework given the thoughtful existing regulations on alternative seurities intermediaries. Rather htan rewiritng the rules or a “drastic overhall of the entire system” as others11 have suggested, we respectfully submit to the Commission that a combination of blockchain data, SRO rulemaking, and direct issuer transparency
Talk about equifax breach, national security implkications per Section II.B.1.a of PREV In discussion on equifax, discuss benefits of outsourcing noncritical functions to qualified and focused service provider, ,In re note 10, Lemma II.B.3.a.i, and note 32 in PREV: Might the Commission, Congress, or another appropriate regulatory branch consider using Persona for login. Gov account identity verification and machine to machine authentication credentialing? Why or why not? Would Comment that in re standardizes login. Gov with secure user identity verification they persona may be a good option (based on piggybacking from IRS Section II.A.2.a of PREV) Stress importance of standardizes login. Gov user authentication in a digital era 5cent increments vs histoic manipulation trying to increase spreads rather than standarizing penny increments between MMs, dragging into MM privalleiged access
Liquidity risk → credit risk → default risk Liquidity issue → BD unable to meet margin call → default event Need adequate calistlization to prevent BD bankruptcy to enable conumer rptoections w UCC8
drafts/introducing basic primatives from DtCC bailout comment per linkedin post: use eisting framework and epxand to increased risk in options during volatilemarkets per https://lemmy.whynotdrs.org/comment/2958881 ask if we're doing any efforts along these lines as I'd like to make sure we get material investor protections here in line with existing thoughts)
Adhere to institutional reccomendation in Section 1.4.1 of www.sec.gov/comments/s7-14-10/s71410-161.pdf on solving proxy voting challenges {{blog post, Dr. Elizabeth Murphy in https://www.sec.gov/comments/s7-14-10/s71410-298.pdf, and and {{ James Mitchell in www.sec.gov/comments/sr-dtc-2008-08/dtc200808-3.pdf}} through indirect holding system perpetuated uncer street-name ownertshup. We believe that the current monopoly over Owner information and the associated monopoly over communication with Owners create significant inefficiencies. — BNY Mellon, Depositary Receipts
Straight death blow would be a really comprehensive analysis of top brokers balance sheets, debotors, etc. And implications on investor portfolios should they go bankrupt. Economic impact
DTCC bailout prep per overwhelming fails Show through GME numbers how some investors will be left hanging Dole Foods supporting argument Require Federal intervention
Our issuer DIUSCLOSURE PLATFOMR per note 29 in PREV. Furthermore, the historical precedent of extending Freedom The lack of competition in this space not only solidifies the OCC's monopoly but also underscores the critical need for transparency in its operations.
See SCI protections and consider extensions under prongs therunder with specific locations.
Rise of new retail brokers offering commission-free trading
Based on PFOF, but there are an increasing number of investors learning about the true hidden costs of PFOF
These investors are not happy with their brokers and actviely seek brokers without PFOF
These investors are also some of the most sophistocated individual investors ever seen
Leads to a decreased use of non-value-add advisory servioces (most broker advising) and self-diverected investment strategeis (e.g. Index fund investing) Therefore, brokers without commissions and may find a lack of material fees from advisory services
Given that a number of these brokers offering quality trading and investing services to individuals also provide realtively high interest rates on cash deposits, there has been a general decline in recent broekr profits (???)
Cite study here from public broker annual reports and general profitability
Leading to merger of TD and Scwab
Consolidation as only way to remain profitable in business
Given all these factors, it seems likely that a cyclical market drawdown may lead to certain broker insolvencies
Bankruptcies are a problem because of security entitlesments and their tradtment under UCC article 8 in bankruptcy proceedings
Elaborate more and example theoretical potentiatiolly
Also problem with inability for creditors to directly access investor collateral assets without going through interrmeiary (???)
As shown in recent market events where a certain broker was unable to meet increased NSCC capital requirements, brokers may have solvency challenges in the coming years.
Given the increased adoption of individual investors generated lower fees, the decreased holdings of certain institutional investors generating higher fee incoime,12 and the increasing awareness of negative externalities in our current market infrastructure which introduce material hidden investing costs, we respectfully submit to the Commission that broker insolvencies exceeding SIPC coverage or reserves for individual accounts are more likely now than ever before, largerly due to extreme indsutry consolidation into a number of innovative but risky enterprises.13 Therefore, we want to ensure everyday investors maintain their portfolios in the case of broker bankruptcies. However, U.C.C. Article 8’s present security entitlement reguime seems particalulty against this objective, as creditors to the broker receipt investor securities for the repayment of obligations before investors receive fully-paid and non-assessable assets.14
In BT as SRO for sake of extending transparnecies to our throgh proceses, internal rulemakgin activie, and ongoing intedrnal compmliance considerations Frame as extensions of investor protections/transparnecy since act as replacement system for CSD as wanted by investors to remeve counterpary liquidiuty ruisks Selling blockchain here with increased basic data transparency and oversight form public itself, who are likely best adept to commet as to the impact of reglation and poicies whjich ultamey agfect themselves or companies which theyt invest ter hard-earned savcings into Transfer Agent Depository and Further Considerations We see the problem in the broker industry in that broekrs only charge fees to investors[^fees]
Some trading institutions require Demat accounts. Access to a dematerialized account requires an internet password and a transaction password. The National Securities Depository Limited (NSDL) introduced the concept of Demat accounts in 1996.
Demat accounts are designed to offer more security and speed to financial trades. They can help to:
- Reduce the risk of loss or forgery
- Eliminate theft, forgery, loss, and damage of physical certificates
- Allow for immediate transfers of securities
- Offer the most accurate form of record keeping
Although brokers presently subsidize their services with material revenues from securities lending, which are gneerally not shared or not materially shared with investors Risk of decrease of securities lending revenue should the Commission take increased action in decreasing FTDs Would decrease the ability of certain market participants to lend out securities not actually held on deposit15
Motilal Oswal on dmat v trading as Axis Bank benfits of accoutn
[blurry ref imgs ommitted]
Motilal Oswal
Who needs a Demat account? What is the difference between DP and Demat? Which Demat is best for trading?
India
Talk about how you have to be a bank or broker to use / you know do things Implicatinos on individual investors Explain custodianship problems as explained in earlier section but you know expand on it! Maintnanece of perverse for-profit incentives
While demat is only accessable to institutions, TAD3 is open to any investor by design. Fjdksfh dshfjk dhskjf sd
Note 6 is TA SRO ask16 Incorporate risk factors NMS stuff here + how we’ll solve :)17
To explain how we presently envision the role of TAD3 in the context of a global capital market, per Section III of PREV, we respectfully submit to the Commission another parallell. Although this reprersentative infrastructure comparison involves illicit activities, we respectfully submit to the Commission that it may exemplify the role of distributed systems in “Web 3.” Alongside this analogy, we respectfully submit to the Commission that, in accordance with note XXXX (US PATENT REVIEW NOT) in PREV, we take money laundering and terrorist financing seriously throughout the design, implimentation, and expansion of TAD3, as further evidenced by our publilc-facing user policies, agreements, and practices avaliable for review on our website.
Tornado Cash was XYZ... Introduce lawsuits and such for frontend operators.
Syndicate SRO members participants are like frontends operators for Tornado Cash. Authenticated users can trade on the go directly with other investors by means of atomic swaps through BlockTrans Syndicate’s investor app. However, as noted in Sectoion III.2.a (???) of PREV, there are certain activites which under the present regulatory regime require the use of a custodian of sorts since transfer agents cannot current perform transactions on behalf of investors, by our present understanding of staff transfer agent guidance, regulations, and non-action letters. An example of such a transaction is performing a dividend reinvestment purchase.18 [[←]] Maybe other examples
Maybe have a footnote around the Tornado cash info
Extend to modifying (respectfully suggest etc) Rule 10b–18 to allow issuers to purchase securities from private investors, without going through a single broker dealer per day, so long as the price is at the current secondary market last trading price. Could be some kind of like variation implications. Main point is talking about reducing risking volatility, since you could do that through a single block transaction, without the costs undue burden of brokerage connections - - - on the assumption that the seller of such securities quote ( or sellers ) is neither solicited by the issuer nor its agents
Accordingly, broker-dealers regulated by the Commission as such may become members of the Syndicate SRO so as to effectuate transactions on the books of issuers, rather than through the costly DTCC system. Dfjiosfjidsjfio dsjiof jdsio fjiods fjdiso fdsoi how it helps everyone yay! (tie into how they kinda like own the old DTCC so this directly ties it all back into them etc)
mv srcs from https://drive.blocktransfer.com/folder/nj3qv8aca55ffe6284206b345e22ef5036020
https://swebbtv.se/w/dLt3gmt9Gzi1AJ7cX2m3CR?start=42m paperwork crisis chat starts at 46 whereafter talks about Dentzler ^ "Even people that have not borrowed money will lose their property because someone else has pawned the property for them."
we can redress Commission staff in the sense that it is widely unknown per sentiments of "top securities attonrneys at largest banks" not understnading https://rumble.com/v4udw6q-new-american-daily-the-great-taking-a-conversation-with-david-webb.html?start=582
All quotes in this comment letter come from Open Access, Interoperability, and DTCC’s Unexpected Path to Monopoly by Dan Awrey and Joshua Macey at Cornell Law School. [[water street comment from there, bailout info from occ sro]]
Although the DTCC moved most to New Jersey last year, the poiint stands that effectively all our present market challenges stem from the DTCC. Unfortunately, due to antiquated DTCC systems and the centralized custodiashgip its operational policies enable, we now face an exocential crisis of innacurate accouintiong throughout the market. These flaws generally propogate at the expense of everyday investors and to the benefit of big banks, brokers, and custodians. We can point fingers all day about how we got to this point over the past number of decades. But the crux of the matter is that, one way or another, there are presently more shares held by investors than ever issued by underlying companies in a number of cases. We will defer citations for this claim to the WhyDRS.org Information Packet previously communicated to Commissioner Gary Genslar, as we believe the diligent, educated, and prudent staff are materially famiar with the widespread continued precedence of failures to deliver enabled by the DTCC despite Regulation SHO. We respectfully submit to the Commission that the DTCC; owned communaly by banks, brokers, and certain private interests; maintains material conflicts of interest with investors and issues, promoting and sustaining an overly-intermediated system of securities ownership, trading, and communications. In this comment and overall agenda regime, we focus on the clear problems of proxy plumbing, , and failures to deliver. We respectfully submit to the COmmission a number of solutions comprehensively solving these predicaments through the Direct Registration System. Ad 13 Auditors declaration of 2023 & prior small T/A
https://www.isda.org/a/vxDgE/Partial-Tear-Up.pdf
DRS as an escape from the rick o using brokers and insolvence as exposed by new DTC etc via UCC8
https://chatgpt.com/c/12a0b3a7-a4f6-4844-a60d-959ce522cf73?oai-dm=1
We respectfully submit that Trading+Markets may find benefit in reviewing fully the implications of note 4 & section 3 in our in re 5723 47 ```
https://www.informit.com/articles/article.aspx?p=1600886
investor support praising gensler / DRS / bad DTC https://www.sec.gov/comments/s7-32-10/s73210-20114693-266935.htm https://www.sec.gov/comments/s7-32-10/s73210-20114768-267030.htm https://www.sec.gov/comments/s7-29-22/s72922-20159068-326915.pdf
https://chatgpt.com/c/1c1d9625-a2c1-47bf-b01c-c7f99c8a4f84 https://www.sec.gov/litigation/opinions?aId=&populate=Alpine+Securities&year=All
Bonus: extending foia access (as not recent common usage) per https://www.federalregister.gov/documents/2023/09/26/2023-20690/the-commissions-privacy-act-regulations
This is presently enabled because brokers have an uncapped authoritity as to decree ownership records
MATERIAL PROBLEM NEED MONEY FROM COMPANIES lol WHY TRANSFER AGENT DEPOSITORY BETTER We understand that the Commission has been contemplating mateiral amendments to transfer agent regulation for a number of years. However, commentors have rightyfully raised the issue that a number of smaller transfer agents serving the needs of small businesses may well be pushed out of the market should their compliance costs increase. Over the past few decadeds, these commentors have rightfully pointed out that, when it comes to modifying transfer agent regulation, the Commission must consider the increased risk to investors should an issuer not be able to afford a transfer agent.
WHY TAD DIFFERENT Dfhjsuifhdisufhuids per fdjskfndks on page XXXX in our comment letter detailing the need for Login.gov machine-to-machine authentication facilities for EDGAR Next programmatic issuer and agent authentication in resonse to File Number S7-15-23 (“PREV). First transfer agent to use CRYPTO FOR TRANSFERS per 17Ad-15 Distirbuted ledger technology .... fjdsfhjkdsfhjks DLT ,dfklsdnfmklds ATOMIC SWAP IMPLICATIONS for investors trading on their own behalf outside of the NMS
Very rresptcfully ask the Commsission to ADD TRANSFER AGENT TO SRO OPTIONS and explain as per present innovation and the space and due to the number of industry-specefic needs for internal rules. Moreover, our decreased cost of operations due to DLT allows us to continue servicing small businesses even if they fail to make regualr service payments, as has been the case with our first client. Per PREV n.6
We repsectfully submit to the Commission that our continued servicing of these presently XXXXXX investors represents a material benefit to our securities market and the growing number of American small businesses at large. IDK MORE STUFF HERE. Thus, we respectfully submit to the Commsission that it may best protect investors; promote fair, orderly, and efficient markets; and faciliate small business capital formation should staff elect to allow for transfer agent SROs in the case of transfer agent depositories in accordance with note XXXX in PREV.
TAD3 Ecosystem Self Regulation Should the Commission deem it to be in the best interest of international investors, regulatorsd, and issuers, we would like to respectfully submit the following guidelines for a BlockTrans Syndicate SRO. We submit that TAD3 may be best understood through a prarallel with Indian securities markets, which have more recently evolved without the undue infliencce of central counterparty clearing houses. We respectfully submit to the Commission that TAD3 is like the demat system. In case staff are not familiar, here is a brief overview of demat, developed by the Indian government:
dematerialization, and is the process of converting physical certificates into electronic form. Demat accounts are digital vaults for stock investments, and are used to store shares, exchange-traded funds, bonds, and mutual funds.
We apreciate that the majority of modern securities markets employ CCP regims.19 Further, we understand the Commission’s aprehension towards such structes, per the recent forced monopolization of Treasury securities clearing and settlemnt Dive deep into that Emmerge with the dissenting opion quote
However, CCPs only emerged in the 19th century because of fundmanetal challenges in debit-ased securities transfers. Namely, such middlemen would not be necessary if it weren’t for the countrerparty risk introduced by early market structures, which are prevalent today.# Transition to more debit based
144 is a very imnportant part of Tas ongoing sevice obligations Commend the Commission on their ongoign efforts to modernize the exemption Segway to removal of word broker because now an effective alternative to cnetraliz exchange like ftx
It is our understnad thiat commission contepklating furthances xxxx^ ^ See, e.g., upcoming second notice of proposed rulemaking at https://www.reginfo.gov/public/do/eAgendaViewRule?pubId=202310&RIN=3235-AM78
Now that I think about it, this sort of obviates the need for Section 16 reporting, can refer to EDGAR NExt final release concerns over the seucirty and material burden on executies in re reporting, likely tie into onerous D&O insurance requirements plaguing the industry
This or a direct bailout backstop onto SPIC etc, but not equitable or likely due to recet FULL SVB bailout
FTDs as zero sum - “fraud leaves a trail; and its purpose is revealed in the other book because the value taken from that book must also have come from somewhere.” from https://iang.org/papers/triple_entry.html
But extyaposted in rehypothecation
if the exchange ends up with a position that has an unrealised loss greater than its insurance fund, then the exchange is effectively bankrupt. At that point, it needs to find a way to cover this loss. One option is for the exchange to add more money to the insurance fund. In theory this is fine, but obviously it has its limitations and if the loss is too large, then it may not even be possible. The other option, is to use the fact that all the money in the system is zero-sum and therefore the profit from the loss that the exchange holds is still “in” the system. After all, someone else (or multiple people) must be holding a same sized profit from the exchange’s loss.
- We don't trust Wall St because Wall St doesn't trust us.20
- Requisite decentralized clearing/settlemnet/exhange [exchange since obv no need for delegation in digital assets]21
- Direct clearing for brokers to use with simle settlement regime comeptition(use as segue to anticompetative practices and materially dive into the need for competition from TAs)
- Narrative around TA future as seomthign more than a cert pusher, express neeed fro better systems per EQ hack and horrendus best pract
- Using regulatory status to preclude competition22
- FAST requirements are based on a flawed system for transferring ownershuip of book entry securities
- FAST requirements do not protect investors because TAs can get 100%-deductable insurance (coul use adequately here if youi want to give some derffference to commission rulemaking procedures commenting on the policies)
move for url heme: idea - https://dao.whydrs.org/refs/MtGox-Situation-Draft-CC-BY-NC-twobitidiot-25-Feb-2014.pdf
https://www.mercatus.org/research/books/permissionless-innovation-continuing-case-comprehensive-technological-freedom at p.85 n. at p.170
Overstock docs source: https://www.economist.com/finance-and-economics/2015/11/10/a-companys-battle-to-show-it-was-a-victim-of-abusive-short-selling
/ostk/{files} probably
^all of this will need to move into static or rebase the repo directory (much harder)
best option is using:
http://cdn.static-economist.com/sites/default/files/pdfs/EN_Overstock_docs.ziphttp://cdn.static-economist.com/sites/default/files/pdfs/Fifth_Amended_Complaint_%28Redacted%29_Redacted.pdfhttp://cdn.static-economist.com/sites/default/files/pdfs/2013-0320_Respondents'_appeal_brief-sealed.pdf
/alpine
https://www.sec.gov/newsroom/press-releases/2013-2013-95htm
https://www.sec.gov/newsroom/press-releases/2024-101 ^ use this as the argument that we need to force medallions for insiders extensive clarifty here based on explicit expeirjnce asking baout internal controsl potentially expand cybersec argument based on n.86 in wooten.link/edgar-resp as xyz (very strong edge case here, i would explciitly reccomend this stay at S-protocol-1555)
https://www.dtcc.com/-/media/Files/pdf/2024/4/26/B20002-24.pdf
https://www.sec.gov/files/rules/sro/nysearca/2024/34-99298.pdf
https://www.sec.gov/newsroom/speeches-statements/gensler-statement-spot-bitcoin-011023
https://www.sec.gov/files/rules/sro/nysearca/2024/34-99306.pdf
https://www.sec.gov/newsroom/speeches-statements/crenshaw-statement-spot-bitcoin-011023#_ftn25
https://www.law.cornell.edu/cfr/text/17/230.241
https://www.law.cornell.edu/cfr/text/17/230.502
https://www.sidley.com/en/insights/newsupdates/2023/12/us-sec-adopts-rules-requiring-central-clearing-in-the-us-treasury-market (ref only likely)
on 17 CFR 240 § 15c3-3(b)(3)(iii)(B) https://www.law.cornell.edu/cfr/text/17/240.15c3-3
conundrum of increased treasuries borrowing cost as financign method comment on rate hikes and such extrapolate? explore furhter. this could be counter-productive because htey might want to hold more Treasuries and post them so that they get a yield at the same time as make a margin call, assuming hypothecation interest goes to poster
- antithical to business model
xyz wooten.link/securrency https://github.com/Securrency/SmartContraX/releases/tag/v0.9.0
Sincerely,
[ORIGINATOR NAME] and the undersigned[^DictionTBD] ^[DictionTBD]: This letter contains contributions from XYZ# WhyDRS DAO members.
Footnotes
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This is what I put as the chain to past arguments as "PREV" on the first page. ↩
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I also incorporate a brief ongoing header thesis to constantly remind the reader of the one thing they can do after understanding the comment. ↩
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See also commoditizing standardization, Section I.A of PREV, and Congressional examination. ↩
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XYZ, big punch here. Potentially fill up the entire rest of this page. Could introduce the three: "waiving margin requirements and turning off the buy button; them allowing Trade 385 to manipulate the prices... [introducing] idiosyncratic risk that could blow up the financial system", ABC "DTCC itself is planning to start up and pre-fund a new central clearing counterparty when one of the of the existing ones fails", and "when we get there" by Paul Conn. ↩
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legla code here/rel no PL avaliable at URL ("TRES") ↩
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See, e.g., Google payments to apple, xyz, and SOMETHIGNBIGTIMTOK - use actual legal doceket ↩
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see OCCM n.24 at 18, provide quotes form src notes if aval. but likely lost to time, back in super early days ↩
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implicate 16 at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1017206 ↩
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See supra {[#1504 note]} S 1 elbaorting on gov implc and introducing WHyDRS DAO (must have formal addresses with discustubtions for this to work) therefore im gonna need the token address before this, which requistites dao-docs #13 https://github.com/WhyDRS/DAO-docs/pull/13 ↩
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Confer scheptical scemantics and present registrations -- prob bmabye use extracted quotes with name hrefs. See also sentiments of Jed at xyz in re expanding and obvious scalign and marketabile liquidity limits ation BTC [er infra n 222> ↩
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See, e.g., Daniel Thieke in Section IV.B of www.sec.gov/comments/s7-27-15/s72715-32.pdf. We respectfully submit to the Commission that we do not need to immediately start “dismantling the indirect holding system, in favor of TAD or any other new approach,” but rather we should just give investors themselves the option of expressing their preffered holding method with, though a system such as TAD3, secondary market tools like those avaliable through the intermediated NMS, tools which are possible directly on the blockchain and solve the unfortunate material issuer plan operational efficiency issues in 80 Fed. Reg.81947 § VII.E, manifesting into ongoing challenges such as bullet 18 of Investor Bulletin: Holding Your Securities (rev. 12 Jul 2023), page 3 from Dr. James Angel in www.sec.gov/comments/s7-12-14/s71214-4.pdf , and risks from interconnectedness between different institutions and international markets in www.theocc.com/risk-management/cross-margin-programs. We respectfully submit to the Commission investors wnat direct pla etc not ideal Heat Lamp? We want to compete, please let us! Ultimately, additional support for the TAD system can be readily observed in the growing number of DRS advocates amongst the investing public, material support for the widespread adoption of DRS in comments such as www.sec.gov/comments/s7-05-22/s70522-20120580-272764.pdf, and an ongoing public outcry for quality realtime data regarding recent market incidents, without a Bloomberg subscription, given increasing volatility in just the last week. ↩
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due in part to increased retail participation. Cite something here with the Melvin bankruptcy and other additional trends in institutional prime broker services (see ppublic reports of declining broker reveneu ↩
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Talk here about a history of risk and lack of capital... cite hard data ↩
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Something about how the inestors think they own if not already established enough, taken away in this case ↩
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Cite the case of the people that had the “generate secuirtes” button. Other studies where they charge fees without actually locating the securities for borrow per page 32 at www.sec.gov/comments/s7-32-10/s73210-20109778-264121.pdf#page=32 ↩
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Further detailed starting on page XXXXX in PREV. ↩
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See Section 2.I.D.2 of www.sec.gov/comments/s7-21-16/s72116-1.pdf covers material self-regulatory public po;lcy challenge related to an ATS. Talk about greant vision and overarhcing motives of social change in re Thesis corfe start of chain principles: Extend this line of logic to a more comprehensive DEX per www.blocktransfer.com/blog/post/investor-to-investor-direct-trading. ... managing the entirety of today’s markets in a consolidated, unanymous, and synchornous global order book per blocktransfer.com/.well-known/thesis.pdf.g ↩
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There may be benefits to investors, market efficiency, and capital formation should an exemption for this routine activity be written into SEC rules. While there are stringent order execution rules for a brokers, we respectfully submit to the Commission that a reasonable set of rules for transfer agents to aquire securities in connection with such a routine pre-planned (PICK A BETTER WORD FOR THAT) transaction may increase the ease by which issuers raise capital through shelf registrations, the rate at which investors compound their retirement savings, and the adoption of self-directed investing, as less repetative manual tasks may increase the ease by wihch users participate on our most developed, andvanced, and liquid capital market. ↩
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As define in note XYZ of PREV. See also notable altenratives infra Section III.A : See remarks on the Vochest Ocschk Kockck [dutch east indies co] in podcast in note CYZ[Lambert] of OCCM. ↩
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See, e.g., supra note [] at n.X detailing the manipulation of capitalistic supply and demand when firsm ceased believing in the ability of free markets to accurately value multiple public companies with current Commission filings. ↩
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See, e.g., .. and then build the narrative around intiial nonprofit system per art/"stimulating" motives docuemnted at (https://web.archive.org/web/20100730143358/http://mtgox.com/trade/history) v. sale and death of single efficient provider after introducing profit (by aquirer) at https://web.archive.org/web/20111016114851/https://mtgox.com/fee-schedule ↩
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By and large, there is generally (in the modern context) only one fucking reasons that an issuer would request a cert pull, whcih was dissalowed at https://www.sec.gov/rules-regulations/self-regulatory-organization-rulemaking/sr-dtc-2003-02 {although I agree with these comments} ↩