diff --git a/TAR-S7-27-15.md b/TAR-S7-27-15.md index d906fc6..a602a53 100644 --- a/TAR-S7-27-15.md +++ b/TAR-S7-27-15.md @@ -34,9 +34,9 @@ Comments on S7-27-15: Strengthening American Leadership in Securities Industries Hi, -The recent executive order promoting innovations asked our government to "identify all regulations, guidance documents, orders, or other items that affect the digital asset sector." Accordingly, we request reveiw of certain onwership exemptions under UCC Article 8 and transfer agent regulations in general. Transfer agents are the most direct means investors have for transacting in the market for stocks. Our National competitiveness in capital markets may depend on ther regulations governing digital-asset providers of these esrvices given a TAD. +The recent [executive order promoting innovations](https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/) asked our government to "identify all regulations, guidance documents, orders, or other items that affect the digital asset sector." Accordingly, we request review of certain ownership exemptions under UCC Article 8 and transfer agent regulations in general. Transfer agents are the most direct means investors have for transacting in the market for stocks. Our National competitiveness in capital markets may depend on ther regulations governing digital-asset providers of these services given a TAD. -We hope the new Crypto Task Force will consider rules directly protecting investor oprtfolios in the case of clearing agency insolvenceies. Hopefully, an updated set of transfer agent governance will spiur an innovative "market structure, oversight, consumer protection, and risk management" that empowers the Commission to protect an overlooked industry sector of increasing importance after the events of four years hence. +We hope the new Crypto Task Force will consider rules directly protecting investor portfolios in the case of clearing agency insolvencies. Hopefully, an updated set of transfer agent governance will spur an innovative "market structure, oversight, consumer protection, and risk management" that empowers the Commission to protect an overlooked industry sector of increasing importance after market events four years ago, when several brokerages popular with retail elected to change access to certain securities to position close only without warning. FOIA Services, @@ -45,7 +45,7 @@ Please see request in note 8XYZ9. In good faith, John Wooten -Member, WHyDRS +Member, WhyDRS #### Addressee @@ -67,10 +67,9 @@ In just one brief lifetime, we've seen our great nation's market system attract https://www.sec.gov/Archives/edgar/data/1783879/000162827921000323/filename1.htm , _available at_ https://www.sec.gov/Archives/edgar/data/1783879/000162827921000280/filename1.htm. +Or at least, it's supposed to be a fair equivalency. Because I was only 16 after months of researching the market, brokers wouldn't extend an account under my name. It was these early trades outside my own control that shaped my underlying passion for efficient securities markets, and my resolve that an investor's portfolio shouldn't be outside of their control. Indeed, I expect quite reasonably that a stock be registered and owned outright in my name when I pay good money to its seller. Do you agree that one's portfolio should be their own property? -Or at least, it's supposed to be a fair equivalency. Because I was only 16 after months of researching the market, brokers wouldn't extend an account under my name. It was these early trades outside my own control that shaped my underlying passion for efficient securities markets. But an investor's portfolio shouldn't be outside of their control. Indeed, I expect quite reasonably that a stock be registered and owned outright in my name when I pay good money to its seller. Do you agree that one's portfolio should be their own property? - -Unfortunately, this is not the case in today's market functions, no matter your age. Indeed, it hasn't been the case since the unstructured monopolization of the clearing and settlement market many decades ago, despite both the Commission and Congress' best efforts.[^mon] For decades this reality has narrowly averted public catastrophe.[^lehman] But we can no longer ignore the pressing realities of these systemic idiosyncratic risks. +Unfortunately, this is not the case in today's market functions, no matter your age. Indeed, it hasn't been the case since the unstructured monopolization of the clearing and settlement market many decades ago, despite both the Commission and Congress' best efforts.[^mon] For decades this reality has narrowly averted public catastrophe.[^lehman] --perhaps here, additional examples would be helpful -- But we can no longer ignore the pressing realities of these systemic idiosyncratic risks. > We have come dangerously close to the collapse of the entire system. > @@ -84,7 +83,7 @@ Unfortunately, this is not the case in today's market functions, no matter your [^lehman]: _See_ Cite the Lehman cases on a protected class. -Fourteen American States have introduced legislation undermining the conceit and constructions DTCC's agents introduced into the 1994 Universal Commercial Code.[^DTCcs] Quite soon, a select few States reconstitute the right of investors to their own portfolios as a due property law. When this happens, I am extremely concerned with the solvency of Cede & Co. should any number of institutional custodians relocate to such jurisdictions to reap the enhanced protections promised by our shared ideologies. +Fourteen American States have introduced legislation undermining the conceit and constructions DTCC's agents introduced into the 1994 Universal Commercial Code.[^DTCcs] Quite soon, a select few States intent to reconstitute the right of investors to their own portfolios as a due property law. When this happens, I am extremely concerned with the solvency of Cede & Co. should any number of institutional custodians relocate to such jurisdictions to reap the enhanced protections promised by our shared ideologies. [^DTCcs]: I want direct quotes here focused by and large on the agent part. The legislative reform should stay in the main argument. [https://fmlc.org/wp-content/uploads/2018/02/Issue-3-Background-paper-on-Article-8-of-the-Uniform-Commercial-Code.pdf#page=8](https://fmlc.org/wp-content/uploads/2018/02/Issue-3-Background-paper-on-Article-8-of-the-Uniform-Commercial-Code.pdf#page=8) "security entitlements" @@ -96,7 +95,17 @@ I am writing to you on behalf of WhyDRS, a decentralized unincorporated nonprofi [^cong]: Cite the two hearings and the Congressional study with tenor-deep ethos -We sincerely appreciate staff's diligent efforts over the past few years of our collective outreach.[^ncs] Your response to our pressing concerns directly shaped the XYZ growth of our decentralized market of blockchain transfer agents XYZABC.[^gren] We respectfully submit to the Commission that now is the time to take action on the years of work industry innovators have built since the advent of widespread blockchain technologies in the past decade. +--Providing some citations: + +https://www.c-span.org/program/house-committee/gamestop-hearing-part-1/588548 + +https://www.c-span.org/program/house-committee/gamestop-hearing-part-2/589320 + +https://www.sec.gov/files/staff-report-equity-options-market-struction-conditions-early-2021.pdf + +Newman, Neal F., GameStopped: How Robinhood’s GameStop Trading Halt Reveals the Complexities of Retail Investor Protection (May 21, 2023). Fordham Journal of Corporate and Financial Law, Vol. 28, No. 2, 2023, Texas A&M University School of Law Legal Studies Research Paper No. 23-16, Available at SSRN: https://ssrn.com/abstract=4459285-- + +We sincerely appreciate staff's diligent efforts over the past few years of our collective outreach.[^ncs] It is a beautiful and appreciated reality that our incredible American institution provides a publicly accessible way to submit issues for public comment, and assurance that those submissions will not only be displayed publicly in kind but that they will be reviewed and considered by bright financial minds. Your response to our pressing concerns directly shaped the XYZ growth of our decentralized market of blockchain transfer agents XYZABC.[^gren] We respectfully submit to the Commission that now is the time to take action on the years of work industry innovators have built since the advent of widespread blockchain technologies in the past decade. [^ncs]: Let's carefully cite a range from the NSCC petition to OCC withdrawal to EDGART modern to things from the other side of the _hall_ with deference to scrutinizing TAR at n/16 (_see Id_) @@ -106,7 +115,7 @@ We sincerely appreciate staff's diligent efforts over the past few years of our Wall Street stunned our community when they unilaterally seized our ability to acquire a public security subject to no restrictions by the Commission. From this shock, our driving **and unwavering** objective centered around understanding the "Rube Goldberg" machine Congress expects staff to effectively oversee on a daily basis. The further many community members dove into market structure, the clearer it became that its reliance on a single fallible party exposes all investors to significant risk. -Since this awakening, we've made every effort to share and collectively inform the public about the pending collapse of our central clearing counterparty securities transfer and settlement system ("CCP Regime"). Namely, the concentration of nearly all investment assets into a **limited partnership trust** presents unworkable conflicts of interest in the expansion of collateral lending facilities, be they direct or implicated by operational policies. +Since this awakening, we've made every effort to share and collectively inform the public about the pending collapse of our central clearing counterparty securities transfer and settlement system ("CCP Regime"). --I'm not convinced using this shorthand to refer to DTCC/DTC/Cede et al is helpful to the cause-- Namely, the concentration of nearly all investment assets into a **limited partnership trust** presents unworkable conflicts of interest in the expansion of collateral lending facilities, be they direct or implicated by operational policies. This point will become more readily apparent as further evidence documents in this comment. One key public article detailing the centrality of this fact exists on our website: *"The DTC/Ceding Ownership – Choice without a Choice."* As the Commission knows, our great American capitalist system relies on voluntary exchange of goods and services. Issuers cannot avail themselves of this basic benefit of free markets because there exists no competitor to DTCC. In fact, such a proposition has been coercively deemed unactionable by some of our nation's leading "Too Big to Fail" banks. We sincerely appreciate staff highlighting these facts in an exceptionally revealing image from the concept release at 45: @@ -114,8 +123,6 @@ This point will become more readily apparent as further evidence documents in th Over the years, we've come to greatly appreciate staff's perpetual diligent efforts to explain these structural nuances to the investing public. I, for one, would have had to pay many hundreds of thousands of dollars in either collegiate expenses or legal fees to comprehend information made freely available through Commission rulemaking, interpretive actions, and public statements. For these grand efforts by your many teams, I sincerely appreciate the immense decentralized power of securities regulation through direct acting agents. Might the present system of increasingly singular execution chokepoints for stock trading directly limit our democracy's ability to govern intermediaries? Namely, can we truly oversee an institution so opaque yet irreplaceable that the select few at its helm decree credit policy so central to market operations? -Might the present system of increasingly singular execution chokepoints for stock trading directly limit our democracy's ability to govern intermediaries? Namely, can we truly oversee an institution so opaque yet irreplaceable that the select few at its helm decree credit policy so central to market operations? - ### Burgeoning Views In the last ten years, certain blockchain technologies have emerged through the work of no central solicitor. Indeed, communities themselves both spawn up around the promise of these innovations and actively participate in building their future successful implementations. This work removes the need for centralized trust and explicitly obviates the function of DTCC and its subsidiaries. In a book profiling the DTCC at the brink of the Great Recession, the corporation's founding CEO wrote: @@ -128,41 +135,39 @@ More and more, today's investors do not trust in either the DTC or its largest m [^tn-hearing-exp]: See note in OCC link video 16; need a real primary source on this. Reached out; use bot for fallback on 24 Feb. -To prevent this blatant theft, there appears to be no alternative course of action than the migration of securities holdings onto the Stellar network.[^xlm-minimal-info] I would like to submit this point to the Commission today but make no further technical elaborations in this letter. In coming to this conclusion, I have extensively contemplated alternatives since my foray into Web3 research and development eight years ago. Four years ago, I began building an open-source alternative to the CCP Regime on this blockchain. This system was materially ready for public deployment upon the submission of my first letter to the Commission two years ago, albeit canonically. +To prevent this blatant theft, there appears to be no alternative course of action than the migration of securities holdings onto a blockchain and, specifically, the Stellar network.[^xlm-minimal-info] I would like to submit this point to the Commission today but make no further technical elaborations in this letter. In coming to this conclusion, I have extensively contemplated alternatives since my foray into Web3 research and development eight years ago. Four years ago, I began building an open-source alternative to the CCP Regime on this blockchain. This system was materially ready for public deployment upon the submission of my first letter to the Commission two years ago, albeit canonically. [^xlm-minimal-info]: Stellar is one of the few platforms that accounts for liquidity at scale without a centralized party (as associated with traditional Alternative Trading Systems). We no longer require these brokerage middlemen to grease the wheels of markets with regard to the trading of securities held in the Direct Registration System. Staff can hear more about how the blockchain network takes a crowdsourced approach to liquidity in our community discussion of its features, _available at_ [https://lnns.co/WJoHIMAXTV4](https://lnns.co/WJoHIMAXTV4). The SDEX gives all users equal access to a global decentralized order book for any pair of assets on the network. Staff can also investigate a more comprehensive analysis of this system's implications on market structure and general societal improvements, _available at_ [https://wooten.link/thesis](https://wooten.link/thesis). Since its genesis in 2014, the SDEX has processed over 4.6 billion trades worth 27 billion U.S. dollars. -Some of our most concentrated financial institutions will attack this proposed free transaction scheme. They probably have a fiduciary duty to do so, which is fine. Certain DTC employees stopped speaking to me long ago. Indeed, even my laundry machine is older than the proposed blockchain network. But I've sunk my life into discovering the most efficient system, and I plan to explain the logic of this choice in another letter. +Some of our most concentrated financial institutions will attack this proposed free transaction scheme. They probably have a fiduciary duty to do so, which is fine. Certain DTC employees stopped speaking to me long ago. Indeed, even my laundry machine is older than the proposed blockchain network. I've sunk my life into discovering the most efficient system, and I plan to explain the logic of this choice in another letter. ### Collective Solution -Since the start of our research and development into the CCP Regime, all local efforts came from volunteers. Individual investors en masse contributed selflessly their insights and revelations, whether it was a few hours parsing legalese showcasing abundant naked shorting[^california] or many days absorbing years of market research.[^intinet-50] This decentralized ollbaoptration lead to our present DUNA structure whereby all communications take place in the open and public light of trasnparenyc, a traint direly neede din today's markets. +Since the start of our research and development into the CCP Regime, all local efforts came from volunteers. Individual investors en masse contributed selflessly their insights and revelations, whether it was a few hours parsing legalese showcasing abundant naked shorting[^california] or many days absorbing years of market research.[^intinet-50] This decentralized ollbaoptration lead to our present DUNA structure whereby all communications take place in the open and public light of transparency, a traint direly needed in today's markets. -[^california]: _See, e.g.,_ Overstock case sdocuemtns released by the _Economist_ among a plethora of evidence detaileing brokers' abuse of central clearing and settlment systems, _available at_ https://wooten.link/economist-suit. OUr fun learning how these FTDs destro y mearkets helps fuel a growign passion for an effective and decentralized market ssysetem. +[^california]: _See, e.g.,_ Overstock case documents released by the _Economist_ among a plethora of evidence detailing brokers' abuse of central clearing and settlement systems, _available at_ https://wooten.link/economist-suit. Our fun learning how these FTDs destroy mearkets helps fuel a growing passion for an effective and decentralized market system. -[^intinet-50]: _See, e.g.,_ analysis of largest market counterparty failures during the buy-button even four short eatrs ago, _available at_ https://www.reddit.com/r/Superstonk/comments/1hxllrt/a_brief_history_of_gamestop_from_meme_to_moass. We all independendyly revolt against Wall Street's immense central control through our understandings of and actions reforming the national market system. +[^intinet-50]: _See, e.g.,_ analysis of largest market counterparty failures during the buy-button even four short years ago, _available at_ https://www.reddit.com/r/Superstonk/comments/1hxllrt/a_brief_history_of_gamestop_from_meme_to_moass. We all independendyly revolt against Wall Street's immense central control through our understandings of and actions reforming the national market system. - -This tsturcute alings direclt yiweth the blockchain solutions staff contemplate as either a replacement to the CCP Regumime or implmentatio nof a TAD system across private and public market.s[^intro-blockchain] The foudngin ethos of thses decentralized digital ledgering networks perpetaully stemmed around "allowing any two willing parties to transact directly with each other without the need for a trusted third party."[^nak-btc] However, the entire CCP Regime reolveds around trusted thirs parties, some so systemically-important that banking regulators deepm them too big to fail. +This aligns directly with the blockchain solutions staff contemplate as either a replacement to the CCP Regumime or implementation of a TAD system across private and public market.s[^intro-blockchain] The foudngin ethos of thses decentralized digital ledgering networks perpetaully stemmed around "allowing any two willing parties to transact directly with each other without the need for a trusted third party."[^nak-btc] However, the entire CCP Regime reolveds around trusted thirs parties, some so systemically-important that banking regulators deepm them too big to fail. [^intro-blockchain]: _See_ concept trelease note 421. [^nak-btc]: _See_ Nakamoto § 1, _available at_ https://bitcoin.org/bitcoin.pdf. -Tuhsm, we are building on top of well-defined cryptographic primatioves or both collaboration adn trasnactional custoyd, defined a system that brings everyone into the same market placing field. This work introduce s a sorely-needed working alternative to the linchpin single custodian entrusted with practically all American securities, as more and more investors demand direct custody of their investments. I will not elaborate extensively on this tehcnolgoy yet, as I find its principles to be our greater coneecern giving the looming safety wholes in the CCP Regume. - +To sum, we are building on top of well-defined cryptographic norms of both collaboration and transactional custody, defining a system that brings everyone into the same market playing field. This work introduces a sorely-needed working alternative to the linchpin single custodian entrusted with practically all American securities, as more and more investors demand direct custody of their investments. I will not elaborate extensively on this technolgoy yet, as I find its principles to be our greater concern giving the looming safety holes in the CCP Regume. -## Systemic Banking Idiosyncharcis +## Systemic Banking Idiosynchrasies -Gowiung up, I was thnot the kind of child to play sports or explore the outdoors willingly. I recall one year in middle school whre my Mom would lock me outside the house for hafl an hour a day. She got quite flstered when I sat in the garage wokring on trivial phone apps. It was that tendanc to find electronic soliutude each day that lead me into our great market system as an indivudal investor. But despite great advnacnemets in coputer tehcnologyu, many legacy financia l functions stilll rely on fialty physcial verification protocols./ +Growing up, I was not the kind of child to play sports or explore the outdoors willingly. I recall one year in middle school whre my Mom would lock me outside the house for half an hour a day. She got quite flustered when I sat in the garage working on trivial phone apps. It was that tendancy to find electronic solitude each day that lead me into our great market system as an individual investor. But despite great advnancements in computer tehcnology, many legacy financial functions still rely on faulty physical verification protocols. -While theyse range in secerity from DTC offering confitmtion meetings and calls to medallions, the core challenge remains anchored in the legacy CC{ Regme's} loic and physial centralization. With Cede as the nexus of all market activity, investors ofgten-unwillingly but coercivvely need to vest power and control to Wall Street's whimsical hypothecaltion fcilities, which I will not extensively explore in this letter. +While these range in severity from DTC offering confitmtion meetings --not sure about this one-- and calls to medallion stamps, the core challenge remains anchored in the legacy regime's centralization. With Cede as the nexus of all market activity, investors often-unwillingly but coercivvely need to vest power and control to Wall Street's whimsical hypothecaltion fcilities, which I will not extensively explore in this letter. -This tendarncy towards efficient difgitrla systems held top-of-mind for me when I waited at least thirt minutes in a courthouse line lsat November./ BUt I was frusterated by the henous events just north of Pittsburgh last year, adn I hoped that my vote of condfidence in our President could help our cross-institutional protocols serve Anmreican investors, not Wall Street elite.s Might we follow in the current Adminsitrations objective "to maintain self-custody of digital assets" which are ou familiar securities themselves?[^DA-EO] +This tendarncy towards efficient digital systems held top-of-mind for me when I waited at least thirty minutes in a courthouse line last November. I was frusterated by the henous events just north of Pittsburgh last year, and I hoped that my vote of condfidence in our President could help our cross-institutional protocols serve Anmreican investors, not Wall Street elites. Might we follow in the current Adminsitrations objective "to maintain self-custody of digital assets" which are ou familiar securities themselves?[^DA-EO] --just after reading through this, thinking it may be handy to add a small disclaimer to the already effective section at the top trying to draw the line between views which represent the collective and those which are personal. Something that shouldn't need to be said but perhaps still could be considering how new the concept of a DUNA is-- [^DA-EO]: _See_ E.O. 14178, where our great President decreed: "the policy of my Administration to support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy" despite surely fighting through traumatic pushbakc, _available at_ https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology. -In accordance iwth this Executive interest in sectors related to support "stability of the financial system, individual privacy, and the sovereignty of the United States," I find it meaningful to consider the Conressional implications[^cede-fail] of a shift trowards decentralization. +In accordance with this Executive interest in sectors related to support "stability of the financial system, individual privacy, and the sovereignty of the United States," I find it meaningful to consider the Congressional implications[^cede-fail] of a shift trowards decentralization. [^cede-fail]: _See, e.g.,_ recebt fuyleaming in File No. S7-10-23 contemplating the failure of the CCP Regume, _available at_ https://www.sec.gov/files/rules/final/2024/34-101446.pdf. Naemyl, the fifth paper cited in note 475 states, "Pervasive reforms of derivatives markets following 2008 are, in effect, unfinished business; the systemic risk of CCPs has been exacerbated and left unaddressed." Its subtitle claims the CCP is "too important to fail" and its author later writes that "their failure would have such a negative impact on the financial system and the economy as a whole that the government would do whatever it takes to prevent such a failure, including effecting transfers from taxpayers." Does the Commission belive _)another_ Federal baloit of Wall Street's mistakes should take preference over grassroots nonprofit investor-centric innovations? @@ -171,7 +176,7 @@ In accordance iwth this Executive interest in sectors related to support "stabil > — The White House - +--I do not think this footnote is currently used (below) is intention here to add section about overvoting and truncation? I'd be happy to pen that in if so. I do see that later on you describe it briefly and link to a similar page on your own site-- [Here's](https://web.archive.org/web/20211125104506/https://www.computershare.com/ca/en/Documents/CPU_OVER_VOTING_OPTION_en.pdf) the (now removed) archive. The document walks through six options, with one of them just being to throw away the broker's vote. @@ -185,6 +190,8 @@ chat ion the @chvss CBDC study and implications in re {{id}} for quote setup given "no further actions may be taken to develop or implement" a CBDC {{id}} +--https://www.dtcc.com/-/media/WhitePapers/Transforming-Collateral-Management-With-Digital-Assets-JSCC.pdf-- + ## Clear Unsolved Challenges Despite best offers from staff throughout an administration of intense individual investor advocacy, many of our structural market problems remain. We applaud the Commission for their exemplary efforts in XYZ_REG_NMS_tick_yya and implementing the universal proxy.[^pers] @@ -209,7 +216,7 @@ As the Commission knows, Article 8 of the UCC created these entitlements in 1994 Holy fucking shit, they can't have FTDs because "Under revised Article 8, there can be only one registered pledge of an uncertificated security at a time." at 883. Statute citation is note 114. -Plainly, there were no FTDs before the 1994 amendments to the UCC. +Plainly, there were no FTDs before the 1994 amendments to the UCC. --I wonder if SEC comm staff aware of this? I would expect that they would be, it's a pretty major part of the infrastructure history-- The ULC argues in _infra_ note 41. @@ -303,7 +310,7 @@ Still restricted The "intermediation failure" part can be laid out without explicit DTCC reference through the other institutions. It will just need to lightly implicate that this is all based on the links commonly underlying the whole framework. -There's one item I'd like to add in a footnote here or in the 144 no-action: +T one item I'd like to add in a footnote here or in the 144 no-action: There was a call between Coinbase and staff discussing their purported TA/ATS structure, which gives rise to clearing agent participation. They claim to ignore this and argue that it does not apply—hurr durr >?>WAS>—lol at App. A ¶ 24, _available at_ https://assets.ctfassets.net/c5bd0wqjc7v0/2pW56ln6rPJ7koLHlu2L8G/5041e0166c408698b621fde543539d76/2023-04-19_Coinbase_Wells_Submission.pdf#page=68. ¶ 25 talks on DAS. @@ -387,9 +394,9 @@ I started drafting this letter in true form after an opening community discussio Indeed, we've produced a mountain of pioneering research, actively clarifying meaningful ownership concepts[^heat-lamp] alongside the Commission's helpful stewardship. Remarkably, as someone new to the community these last couple of years (canonically), all this action took place with no central coordinator, no compensation mechanism, and no legal offices. We live in a very different time than the days past when our current systems originated.[^diff-time] Given the burgeoning environment... does the Commission believe XYZ is more masculine... now is the time for a new and tested system? -[^heat-lamp]: _See, e.g.,_ comments referencing a "due diligence library" with hundreds of original research pieces discussing meaningful operational nuances not known to the markets; _available at_ https://www.sec.gov/comments/s7-14-22/s71422-279105.htm, https://www.sec.gov/comments/s7-08-22/s70822-272484.htm, https://www.sec.gov/comments/s7-18-21/s71821-20111377-264966.pdf, _inter alia_. _See also relevantly_ one particular piece documenting the operational efficiency custodianship practices of certain agent share purchase plans, expanding operative trust past the bounds specified in concept release § VII.E.2, _available at_ https://wooten.link/heat. Namely, we have confirmed through discussions, conversations, and by definitive website "Q&A section" updates certain operations by a leading transfer agent that allow shares held in a directly-registered investor's name to be swept into agent nominee custodianship without due notice or consent should such an investor enroll in an issuer plan, be it directly shelfed on an S-3 or not voluntarily perpetuated by issuers themselves. While the release does mention this option as a possibility for known brokered holdings, I find it materially worrisome given the declared holding of plan-custodian nominee shares in a DTCC/Cede account at a market broker for the sake of accessing trading liquidity. +[^heat-lamp]: _See, e.g.,_ comments referencing a "due diligence library" with hundreds of original research pieces discussing meaningful operational nuances not known to the markets; _available at_ https://www.sec.gov/comments/s7-14-22/s71422-279105.htm, https://www.sec.gov/comments/s7-08-22/s70822-272484.htm, https://www.sec.gov/comments/s7-18-21/s71821-20111377-264966.pdf, _inter alia_. _See also relevantly_ one particular piece documenting the operational efficiency custodianship practices of certain agent share purchase plans, expanding operative trust past the bounds specified in concept release § VII.E.2, _available at_ https://wooten.link/heat. Namely, we have confirmed through discussions, conversations, and by definitive website "Q&A section" updates certain operations by a leading transfer agent that allow shares held in a directly-registered investor's name to be swept into agent nominee custodianship without due notice or consent should such an investor enroll in an issuer plan, be it directly shelved on an S-3 or not voluntarily perpetuated by issuers themselves. While the release does mention this option as a possibility for known brokered holdings, I find it materially worrisome given the declared holding of plan-custodian nominee shares in a DTCC/Cede account at a market broker for the sake of accessing trading liquidity. --I might temper this section a bit, I think we can be very clear about what's been admitted to but also be clear about what we don't know regarding the Dingo nominee holdings and the subsection held with Cede-- -Regardless of the risk surrounding SROs, millions of American investors risk the insolvency of transfer agent nominees (or third-party administrators, as the case may be). Given the frequent complex relationships between such custodians and broker-dealers, any mishandling of securities lending practices could place the most direct form of employer-sponsored retirement savings in risky hands. Given Wall Street has been known for decades to mismark short positions as long,[^recently] do staff believe that nominee administrators' model of grabbing investor services "at no charge or for a modest fee"[^free-quote] can sustain the bookkeeping prudence costs associated with largely state-overseen holding compliance? +Regardless of the risk surrounding SROs, millions of American investors risk the insolvency of transfer agent nominees --do you think it's worth expanding here on the idea that in UK there is a forced legal disclosure from TAs stating plainly that in case of nominee insolvency they are responsible to make investors whole, but for US TA operations there is no similar requirement?-- (or third-party administrators, as the case may be). Given the frequent complex relationships between such custodians and broker-dealers, any mishandling of securities lending practices could place the most direct form of employer-sponsored retirement savings in risky hands. Given Wall Street has been known for decades to mismark short positions as long,[^recently] do staff believe that nominee administrators' model of grabbing investor services "at no charge or for a modest fee"[^free-quote] can sustain the bookkeeping prudence costs associated with largely state-overseen holding compliance? [^recently]: _See, e.g., recently_ RH fee, discussion thereof both TS and DC, _available at_ https://www.sec.gov/newsroom/press-releases/2025-5. @@ -601,6 +608,8 @@ Perhaps implicate it lightly with identification and name-dropping of the select #### Chives' thoughts +--will need to reformat section into direct response to the DTCC blockchain study which has been mentioned a few times already-- + The diagram on 112 is simple and fantastic, in my opinion. It doesn't cover custody, but it doesn't need to be appreciated—types of assets and implied claims therein. I also think the tokenization explainers on 113 are fantastic. "Tokenization has the potential to unlock the benefits of programmable, interoperable ledgers to a wider array of legacy financial assets," with a graphic to the right establishing where relevant data is stored (ideally, a public read blockchain, but similar to DTCC, this is unspecified). **SIDEBAR** - WhyDRS could use articles breaking down tokenization in a similar way but from a custodial perspective, relating it to a title deed in a safe if holding the private key. @@ -700,6 +709,8 @@ Accordingly, it's my intention to donate my shares in the company to WhyDRS, pre Firstly, I would appreciate a reply from staff within 90 days as to the ownership of a blockchain transfer agent by the DUNA, as such a nonprofit arrangement mimics existing regulatory-oversight schemes availed of Federal recognition. Implications from the Commission's response to this gift could materially assist community members with an analysis of whether or not to accept the shares. Namely, this combination of equals into a superstructure for public infrastructure quite directly raises the participatory and reputational bar for our ongoing social efforts toward efficient markets. +--Love this John, I wish I'd seen it sooner to compliment you on the gumption and forethought to see direct comment from the SEC on this intention.-- + Secondly, maybe we can introduce putting this out to comment again. What we need should DTC fail is nothing short of a completely new (inter)national market system.[^global] I find the prospects of such a market controlled by one private corporation bleak. Given past experience shows the centralizing tendency of good clearing infrastructure,[^DTCC-path] @@ -862,4 +873,4 @@ Peirce and Uyeda dissent on last month's electronic modernization through (inlin > Like any technology, specific structured data languages can become obsolete—similar to how the "write once, read many" technological storage format (i.e., CD-ROM) for broker-dealer books and records remained a rule requirement far beyond its useful life. -https://www.sec.gov/newsroom/speeches-statements/peirce-uyeda-statement-focus-report-121624#_ftn6 \ No newline at end of file +https://www.sec.gov/newsroom/speeches-statements/peirce-uyeda-statement-focus-report-121624#_ftn6