Fannie Mae-No Politics (FNMA)

[obiterdictum]

The National Securities Clearing Corporation (NSCC) processes OTC equity short transactions for its members. Among its members are the leading FNMA and FMCC OTC Market Makers that are, for example, listed below in order of the number of January trades of FNMA from greatest to least:

ATDF - AUTOMATED TRADING DESK FINANCE - 57,499,014 FNMA shares traded
NITE - Knight Capital Americas LLC
CDEL - Citadel Securities LLC
ARCA - Archipelago Trading Services
ETRF - G1 Execution Services, LLC.
CSTI - CANACCORD GENUITY INC.
BKMM - BNY MELLON CAPITAL MARKETS
MERQ - MERCATOR ASSOCIATES, LLC
STXG - Stockcross Financial Services
UBSS - UBS Securities LLC
CANT - Cantor, Fitzgerald & Co.
PUMA - Puma Capital, Llc
AEXG - ALTERNATIVE EXECUTION GROUP
BTIG - BTIG, LLC
GUGS - Guggenheim Securities, LLC
MAXM -Maxim Group LLC
VERT - The Vertical Trading Group
VNDM - Vandham Securities
RAJA - Raymond, James & Associates
WEED - Weeden and Co. Inc. 1,101,000
VFIN - vFinance Investments, Inc.
WABR - Wall Street Investor Services
TRAS - Tradition Asiel Securities In
RAFF - Rafferty Capital Markets, LLC
LAFC - R. F. Lafferty & Co., Inc.
LAMP - Lampost Capital, L.C. - 449,330 FNMA shares traded

The discontinuance of the stock borrow program is due to lack of use by stock borrow participants and loss of economic viability. As stated in the filing:

Usage of the Stock Borrow Program has since dropped by almost
95%. In October 2013 only three Members participated in the Stock Borrow Program, and the
average daily value borrowed at the close of day during that month was approximately $81
million. Usage of the program has continued to drop since the end of October 2013. Given this
dramatic reduction in the use of the program, NSCC has determined that it is not economically
efficient to maintain the service, and NSCC is proposing to amend its Rules in order to
discontinue the Stock Borrow Program. NSCC has informed the Members using the Stock
Borrow Program of its intent to discontinue the program.

The three using members are not identified.

Even so, this, means that short clearance will continue elsewhere without much change in short sales and short interest and most likely via the The Depository Trust Company (DTC) that is like the NSCC, a subsidiary of the The Depository Trust & Clearing Corporation (DTCC).

(B) Clearing Agency’s Statement on Burden on Competition

NSCC does not believe that the proposed rule change will have any impact, or impose
any burden on competition due to the dramatic reduction in use of the Stock Borrow Program by
NSCC Members, as described above

Sources: NSCC Member Directory - http://www.dtcc.com/client-center/nscc-directories.aspx

Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing of Proposed Rule Change To Discontinue its Stock Borrow Program
https://www.federalregister.gov/articles/2013/12/27/2013-30936/self-regulatory-organizations-national-securities-clearing-corporation-notice-of-filing-of-proposed

http://www.sec.gov/rules/sro/nscc/2014/34-71455.pdf