Transformations, Tensions, and Triumphs: Investors celebrate success of transparency campaign sparking fund association court clash. Check out what has put the scare back into Wall Street.

TL;DR

• This Federal Register Document outlines new rules related to short position and short activity reporting by institutional investment managers.
• It introduces Form 13F–2, which mandates institutional investment managers to report short sale-related data, particularly for equity securities.
• This particular rule amendment now mandates Investment Portfolio managers to report any short position exceeding £10 million.
• This rule has been extensively discussed by the r/Superstonk community and their engagement played a big role in it's reshaping.
• National Association of Private Fund Managers, Managed Funds Association, and Alternative Investment Management Association have issued a complaint that argues the rules are 'inconsistent' and violate the Administrative Procedure Act (APA).
• ⚠️ WARNING: 🚨 Their petition requests the court to declare these rules unlawful and cancel them 🚨

2024 kicks off with a bang, and in celebration of household investors' previous and most excellent advocacy efforts, we introduce our latest success!

Today we're celebrating how our continued efforts to fight for regulation and reform are WORKING to enact much needed change.

Across the globe, with at least 156 countries and territories worldwide, thousands of household investors have been actively joining the fight for their rights, making a significant impact in shaping regulatory landscapes.

Revolutionising the financial landscape, household engagement with market reform brings a comprehensive array of positive changes, including:

• ✅ Increased Transparency
• ✅ Enhanced Data Access
• ✅ Strengthened Investor Protections
• ✅ Reduced Monopolistic Influence
• ✅ Fairer Regulations
• ✅ Market Accountability
• ✅ Inclusive Market Participation
• ✅ Ethical and Responsible Investing
• ✅ Strengthened Regulatory Oversight

Recognising the significance of utilising our collective voices, we have actively engaged with numerous rules and regulations throughout this epic GME saga to drive this necessary change.

Such rules include, but are not limited to:

• File No. S7-31-22; Release No. 34-96495: Order Competition Rule
• File No. S7-30-22; Release No. 34-96494; Regulation NMS: Minimum Pricing Increments, Access Fees, and Transparency of Better Priced Orders
• File No. S7-32-22; Release No. 34-96496· Regulation Best Execution
• File No. S7-29-22; Release No. 34-96493· Disclosure of Order Execution Information
• File No. S7-06-22; Modernization of Beneficial Ownership Reporting
• File No. S7-08-22; Release No. 34-94313; Short Position and Short Activity Reporting by Institutional Investment Managers

As we advocate for increased transparency and equality in the financial markets, all our comments and letters to the SEC have quite literally changed how the markets operate, shifting the focus to allow for a level playing field in which everyone can prosper fairly and equitably.

Why is this important?

Implementing these changes through household engagement in market reform brings the much-needed fortification for the long-term protection of people's financial assets.

Many rules, previously categorised as outdated, detrimental, and self-serving to select market participants, are being addressed by wider audiences. They aim to establish a foundation of transparency, ethical practices, and strengthened regulations, creating a more resilient and fair market environment.

This, in turn, safeguards investors from potential abuses, promotes responsible investing, and fosters a sustainable financial ecosystem where individuals can confidently participate, knowing their assets are better protected and their interests are prioritised.

Isn't that epic?

And it's all thanks you.

In our relentless pursuit of fairer and freer markets, Gary Gensler, Chairman of the SEC (Securities and Exchange Commission), along with his dedicated team, has proactively implemented crucial rule adjustments. These changes are a direct result of the copious comments and letters submitted by YOU, the household investors, illustrating the impactful role your collective voice plays in shaping and influencing the financial markets.

And these adjustments are about to seriously fuck up Wall Street's day.

So let's check out what new rule has got Wall Street so worked up.

The Federal Register have released a document regarding "Short Position and Short Activity Reporting by Institutional Investment Managers." and it highlights a significant regulatory development in the financial industry.

Here's a breakdown:

1. Federal Register Document

Key Points:

• The document outlines new rules related to short position and short activity reporting by institutional investment managers.
• It introduces Form 13F–2, which mandates institutional investment managers to report short sale-related data, particularly for equity securities.

Exciting isn't it?

Let's deep dive into what this means so we can really bask in all it's excellence.

This is the report here:

Now as this document is very, very long -

I'll do my best here to offer an overview. But it basically states that:

• ✅ Institutional investment managers engaging in short selling now face new reporting obligations.
• ✅ There's mandatory monthly reporting under the new rule and Form SHO.
• ✅ Short sellers must disclose specified short position and short activity data for equity securities.
• ✅ Short sellers relying on bona fide market making exceptions must now report this reliance.
• ✅ Amendment to the NMS plan for consolidated audit trail necessitates additional reporting.

Look at that!

We're only talking a bringing in WHOLE LOT MORE TRANSPARENCY when it comes to SHORT SELLING!

Previously only FINRA firms reported their short interest. But now with the new rules amendments - drum roll please..... 🥁 🥁 🥁

💥 Investment Portfolio managers need to report a short position of more than £10 million 💥

And this reporting requirement applies to both domestic and international investment managers.

Not only is this 'ruddy excellent for all those who champion transparency and accountability - but who doesn't love more data about institutions and their short positions?

And now participant participants are obligated to report their short positions, this information empowers individual investors to make informed decisions and understand the dynamics at play in the stock market, promoting a more transparent and accountable financial system.

All made possible thanks to household investors championing regulation and reform.

Everything we see here has been made possible because regular, everyday, and wonderfully ordinary household investors got involved with regulation reform.

Every Voice Matters.

Looking back to the work we did with: File No. S7-08-22; Release No. 34-94313; Short Position and Short Activity Reporting by Institutional Investment Managers.

The r/Superstonk community banded together in their masses to create posts and raise awareness about the rule proposals put forward by the SEC.

In an effort to increase transparency and change current legislation, which would compel SHFs to disclose their short positions, these most excellent community contributors invested time, tireless effort, and unwavering commitment to inspiring, assisting, and motivating others.

They took legitimately heroic actions to bring attention and influence meaningful change over a game-changing rule—and it was incredible.

With their work and passion guiding the way, united in this cause - investors from across the globe got involved, got loud - to pave the way for the very changes we see taking place here today.

To acknowledge some of these efforts, check out this handful of incredible engagement posts here:

This is only a snapshot of all the excellent educational submissions we saw on this sub to inspire others to leave their comments with the SEC - and it worked.

And you can check out more of these truly exceptional posts here & here.

Couple this with educational letters submitted from such advocacy platforms as We The Investors:

Resulted in hundreds and hundreds of YOUR comments pouring into the SEC - to advocate for changes in the market.

Just check out how many individual household members made a difference:

To see who etched their names into the history books - check out the submitted SEC comments here.

And that's just the tip of the iceberg.

It's gotta feel pretty motivating, right?

What's more - according to the report, here are just some examples of how YOUR comments have impacted the new rule changes:

^{**Bear in mind that these are the cumulative impacts of both our comments and those submitted by financial entities, like Wall Street.}

Scope of Persons Covered by Final Rule 13f–2: Comments led to maintaining the focus on institutional investment managers, emphasising diverse participants for transparency.

Exemption for Certain Managers: Commenter input influenced the adoption of a reporting threshold based on a monthly average, addressing concerns for occasional reporting triggers.

Scope of Reported Securities: Commenters influenced a more expansive approach, advocating for reporting on all securities and ETFs to enhance information availability.

Inclusion of ETF Securities: Commenters suggested including ETF securities in reporting scope, emphasising the need for comprehensive data. The final rule aligns with this view, encompassing ETFs within the reporting requirements.

Timing of Reporting by Managers and Publication by Commission: Comments on the frequency of reporting influenced the SEC to maintain the proposed 14-calendar-day reporting period after each month, addressing concerns about data accuracy while balancing the desire for more frequent transparency, with the Commission estimating aggregated data publication within one calendar month after the reporting period.

Not a bad start, eh?

If you want to read the full report for yourself, you can check it out here.

Inspiring, isn't it?

It is essential to acknowledge the substantial potential within each of us. Every action, stemming from that potential, generates a ripple effect that extends beyond our immediate influence. Together, meaningful change emerges from the collective desire to enact positive transformation.

These household investors share a vision for a better future and are actively working towards it as they unite together. The realisation of their success is not left to chance; rather, it will be the end result of collective efforts. This achievement is to be shared by all, the outcome of their collective input.

If you have investments in the financial markets, safeguard your assets by actively engaging in efforts to shape market reform and advocate for much needed changes.

And for all those who are consistently getting involved, just know your impacts are legendary.

The overwhelming accomplishments of the many pulling together to enact change brings us on to the next part of this post.

National Association of Private Fund Managers, Managed Funds Association, and Alternative Investment Management Association have launched legal action against this ruling.

As you may expect; the Fund Association was less than impressed.

So let's contextulise this for a hot minute.

This new rule amendment, advocated by household investors across the world, signals some challenging news for those heavily short on GME - especially for those attempting to keep their short positions secret.

This isn't the first time Wall Street have tried going after the SEC.

Recently household investors have been contacting their congress representatives to fight back against Wall Streets' attempt to defund the SEC by slipping in changes to a House appropriations bill to kill market reform.

You can check out more information about that here and here (includes content from Dave Lauer & We The Investors).

Because of course, if the SEC can't regulate the markets - they won't be able to enforce the rules that hold financial institutions accountable.

Rules like; File No. S7-08-22; Release No. 34-94313; Short Position and Short Activity Reporting by Institutional Investment Managers.

But alas, to go against this ruling is pretty detrimental in terms of disregarding the will of the people.

And doing this - aka taking legal action against the regulatory agencies who are putting actions in place to enhance transparency - only seems to suggest that Wall Street may have something to hide.

Now this starts off as a little strange.

This link here used to provide us access to a readable version of this petition: https://www.managedfunds.org/wp-content/uploads/2023/12/Petition-for-Review.pdf

But for some reason, has since been removed.

But thankfully for everyone here - I saved the PDF copy so everyone can read it.

Let's check out what the issue is:

The document here is a legal petition/complaint against the rules outlined in the Federal Register.

This petition for review has been filed by the National Association of Private Fund Managers, Managed Funds Association, and Alternative Investment Management Association.

They are challenging two rules issued by the U.S. Securities and Exchange Commission (SEC):

Those two rules are:

1. Securities Loan Reporting Rule: This rule imposes new requirements for reporting and public disclosure of information related to securities loans that facilitate short-sale activity.
2. Short Position Reporting Rule: This rule mandates reporting and public disclosure of information concerning short-sale activity itself.

And what this effectively means is -

• SEC issued two rules regarding short-selling disclosures.
• National Association of Private Fund Managers, Managed Funds Association, and Alternative Investment Management Association issued a complaint that argues the rules are 'inconsistent' and violate the Administrative Procedure Act (APA).
• Petitioners claim SEC contradicted itself by acknowledging issues with detailed short-selling disclosures in one rule but still imposing daily disclosure requirements in another.
• Various reasons in the complaint include conflicts with legal authority, excessive costs, and procedural shortcomings.

🚨 The National Association of Private Fund Managers have requested that the court declare these rules unlawful & cancel them 🚨

Seems to me that someone might be nervous about all the changes we're bringing in.

We'll leave that here for now - but will keep you updated on developments, and stay invested folks. These are our financial markets and we deserve to engage on a level-playing field.

LOOKING TO THE FUTURE 💫

There's always work to be done when it comes for advocating for the well-being and protection of our financial markets.

Whilst we continue to bask in our accomplishments, we are long from done - and so we set our sights on our next call as we do all that we can to bring about a better future for everyone.

Our next post will be looking at the following in more detail:

In what appears to be a change to prevent what caused the sneeze from happening again, Options Clearing Corporation is looking to adjust parameters for calculating margin requirements during periods when the products it clears & the markets it serves experience high volatility. OPEN for comment!

https://dismal-jellyfish.com/occ-revamps-idiosyncratic-margin-requirements-volatility-controls/

With much appreciation to Dismal-Jellyfish for bringing this to our collective attention 💪

If you want to help make a difference, why not do your part to inspire those around you so that we can celebrate another massive win together.

TL;DR

• There have been regulatory changes that will put pressure on short position reporting obligations
• Investment Portfolio managers need to report a short position of more than £10 million.
• Household investors campaigned to make that possible.

With much appreciation to Platinumsparkles💖✨ for the resources as shared above.

That's all folks.

Be excellent to each other.

Pigeon out ✌️🐦