The NSCC is taking accountability as a third party between lenders with the NSCC-2021-010 proposal.
We now have a referee in the market saying everyone needs to play fair.
Will it be implemented anytime soon?
Here’s what’s going on.
Update: this proposal will be filed on August 23rd and effective on August 24th per this FINRA letter, page 3.
Bookmark this page for additional updates.
Update: The proposal was delayed for November and was delayed again on November 5th, 2021.
Update: On March 25th, 2022, NSCC withdrew the proposed rule change (SR-NSCC-2021-010) detailed below.
This article will stay up for archive purposes. You may read the original text below to see how this proposal would have affected short sellers and retail investors. Leave a comment below with your thoughts on the cancelation of this proposal.
Welcome to Franknez.com – the blog that fights against FUD media. Today we’re discussing a rule that could potentially help retail investors against market manipulation.
Let’s get started!
(ARCHIVED 2021) | Updated March 30th, 2022.
Although this proposal has been delayed a few times, I’m going to go over the significance of it if passed.
We must urge regulators to pass this proposal because it will level the playfield for retail investors.
What is going on with the NSCC essentially cleans the slate for retail investors.
The AMC community will now be able to drive AMC’s share price without illegal tactics in the stock market if this proposal is passed.
All the opposition that prevented AMC Entertainment stock from reaching $100 per share will no longer be able to drive the stock down if this goes through.
As a result, the momentum that retail investors create will bring higher and quicker upswings in AMC stock.
Breaking away from $30-$40 range
Like many potential catalysts, this could very well be one that could wipe out more hedge funds.
Is this why Anchorage Capital threw in the towel?
NSCC-2021-001 is a major threat to hedge funds.
Why it’s been delayed for several months is beyond me, this proposal should have gone through during the summer.
All retail investors need to gamma squeeze AMC at this moment is to bulk up on the stock, we’ve known this.
However, short sellers have increased their dark pool trading usage and OTC trading strategy as well.
These illegal backdoors have allowed hedge funds to heavily short AMC stock through a rinse and repeat process retail investors have no control over.
Well, the NSCC is stepping in to take accountability for every transaction being made in the market.
The NSCC will act as a third party to oversee transactions between lenders to stabilize the stock market.
This means the markets will not be as volatile.
And this is all possible due to proposal NSCC-2021-010.
But more on that in a moment.
Time to play offense
Right now is the perfect time for retail investors to go on the offense.
By driving AMC stock up, short sellers will further accumulate heavy losses on paper.
Charles Schwab have already raised margin requirements for both AMC and GME stock.
JP Morgan on the other hand is implementing intraday margin calls up to 7 times per day to ensure short sellers have enough cash at hand to cover their positions.
This puts short sellers in the most extreme condition they’ve ever been.
That’s because the more money they lose on paper means the more money they’re being expected to fund their margin accounts with.
And with the feds now stepping in, margin requirements are about to get a whole lot higher.
Before, they were able to short the stock down to avoid immediate liquidation.
Now, proposal NSCC-2021-010 prohibits short sellers from creating failure-to-delivers as well as naked shorting!
This means they can no longer short AMC stock in extreme measures using naked shorts like they have been.
The FTDs? All call options in the money should now be properly executed which will result in gamma squeezes that will drive up AMC stock up; breaking the $30-$40 range.
If you bought in during AMC’s climb, you’re about to break even real soon.
And once you do, you’re going to begin seeing profits on paper shortly after.
The NSCC is going to watch every transaction
The NSCC has the potential to take away the enemies’ weapons and now it’s time for retail investors to charge full on.
If this proposal goes through, hedge funds will be stripped from their power to manipulate AMC through naked shorting and FTDs.
Short sellers now cannot take another massive round of momentum.
This momentum could cause immediate liquidation by brokers if margin accounts fall short of requirements.
A third wave of momentum will eliminate more hedge funds shorting AMC and could potentially spark the MOASS.
The NSCC requires collateral
If that wasn’t enough, the NSCC-2021-010 also requires that lenders have the collateral at hand when trading stock.
So now hedge funds have JP Morgan, Charles Schwab, and the NSCC requiring them to keep an insane amount of cash at hand for once they get squeezed out of their positions.
The NSCC essentially plans to make sure everyone’s money is there before positions begin to get liquidated.
This cash collateral is going to prohibit short sellers from overleveraging their positions.
You take out overleveraging, and you take out the excessive manipulation in the market.
From this perspective, the biggest thing hedge funds fear the most is extreme volume from the community again.
We’re talking about executives selling their cars, homes, properties, assets, you name it; to keep their margin requirements up.
Will it get to this point?
Not unless short sellers close their positions now.
Hedge fund scrutiny intensifies
Hedge funds have been under extreme scrutiny recently.
Democrats have even begun broadening consequences for hedge funds causing disruption in our economy.
In fact, if the Capital Markets Engagement and Transparency Act passes, hedge funds would be required to publicly disclose their bets against stocks as well as dark pool data.
The SEC cracked down on 27 financial firms for FTDs earlier this summer.
And although Citadel was not on that list, the feds are investigating them as well as Robinhood for market manipulation.
There might have been a point where it felt like short sellers had the upper hand in the markets but not anymore.
Retail investors now have the SEC, NSCC, and the Feds auditing the financial system.
The AMC community is forcing change.
I’ve said many times before.
It’s you as an individual within the community that has so much power to make things happen in the real world.
The AMC community and the movement will be recorded in financial history.
The financial system is not perfect, and neither are its regulators, but one step forward is better than none.
Proposal NSCC-2021-010 Canceled
This article will stay up for archive purposes.
The cancelation of this rule does not change the short interest data or possibility of a short squeeze.
And although the article’s initial context was very positive, the community has the power to raise awareness of the injustices in the market.
Leave your thoughts in the comment section below.
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Read: Anchorage Capital closes after betting against AMC stock
About The Author
What is the latest on 010? When does it go into effect? Thanks!
it doesn’t appear that anything has changed. shorts are out of control.
We broke the $30 levels of resistance. Our progression has merely been slowed down. Once the lid pops from all this pressure, none of this manipulation would have mattered. Shorts are getting crushed and it will be a matter of time before AMC has runway to surge again.
Does this affect OTC as well?
Noticed an error. You say
“All retail investors need to gamma squeeze AMC at this moment is to bulk up on the stock.”
However a gamma squeeze is the product of heavy OTM options buying forcing option sellers to delta hedge the underlying stock. That’s how the sneeze happened in January, all the wSB degens piling into short-dated OTM calls essentially made every 1 option contract they bought worth the 100 shares the option seller would then need to buy to make sure their call was covered.
Right now the high IV of GME and AMC options makes the prices much higher than January. That means apes will need to dig deeper into their pockets to fund a gamma squeeze. But yeah, if you want to launch the MOASS with a gamma spike we need heavy OTM call option buying along with the share buying.
Awesome information brother – thanks for sharing Stonky
I am so glad I found your articles…they are really helping me understand exactly what is going on. I am in the UK have 37 shares and am quite sure it will be the best money I ever spent 😊 Without you, I wouldn’t have a clue!! So thank you so much! 👏👏
Vicki thank you for your comment. I appreciate you reading the blog and cheer you on for being part of this movement. We will prevail
I do understand what you are saying, but haven’t we heard this before…. Can the SEC change the ballgame…. hmmmm. When we see the stock move up to the $50 to $70 range and go sit there for 2 or 3 months perhaps that’s a good thing… still Hodl
Change takes time. I believe the community has immense power to make change happen.
So will we investors see any noticeable change(s) on 24 August? If so, what are some of the changes?
Always a great read sir!
I appreciate that Timothy – if properly regulated, AMC should have clear runway to move up without interruption from short sellers
So, I’m a little confused on one aspect of this filing. Is there a specific date when filing amendments or or other changes to rules? If they’re trying to get rid of naked shorting, why not just make one unambiguous rule that cannot be manipulated and that has zero “grey area”? Also, if there’s no specific file dates, ie third Tues of each month, why not just slap a rule #42069 (for example) NO MORE blank OR YOU’RE BANNED FOR LIFE NO EXCEPTIONS!
Seems to me all of the “filings” are just smoke and mirrors designed to appease the masses. If you want to stop bleeding from your foot, you don’t put a few bandaids on your nipples. Wake up people! We need to start asking the right questions and demanding answers from Gary Gensler. Retail owns 80% of the float. We are AMC!
I agree with you – there needs to be serious consequences. Democrats are actually working on this and have targeted Citadel specifically. Justice WILL be served. Thanks for commenting brother
The Democrats….. 🤣 what can they do….. hmmmm
I feel like we have to look at the bigger picture and find commonalities, regardless of parties.
Raise tax rate for the new millionaires
That’s not how it works 😅😂
Hello, amazing article, as always. Please could you tell me how do you get to the date of August 23? I have looked at the 45 days from the date of publication but I cannot find this date clearly. Thanks for your help.
Hey Antonio! Here’s the link to the letter confirming this, page 3. I’ll update this on the article.
Is finra sr-010 a different rule to nscc 010 though ?
That’s just FINRA’s ‘proposed rule change‘. It’s for the same proposal. Great question that might clarify for others. Thanks Phil
My biggest question, will this stop the naked shorting/FTD’s all together or will they be fined for these actions, If they are fined, how much is the fine? If it’s 20 million fine and they can make a 100 million, this won’t stop anything.
The point is to stop it. I feel like we should give them the benefit of the doubt and keep a positive attitude towards possible change. It took time for the community to be heard, I expect it will take time for change to occur. Thanks for commenting brother.
Thanks for the reply. I’m a new investor and I hope this helps, but time will tell..
Exciting, I imagine this is only in review to delay the initiation of the MOASS so that they can put more things in place for such an event that would even further reduce the blast radius.
I agree!
Within 45 days of this publication on the Federal Registry is the effective date
Keyword: WITHIN
Time frame for this rule?
Within 45 days of this publication in the Federal Registry
it would be effective starting August 24, not 45 days
Love your articles, I read them all the time and I agree with you. When is this rule being passed?
Thanks Martin! The proposal can be passed at any time but has up to 45 days in case any revisions must be done.
Very Great!!
👊💯🚀