The US Securities and Exchanges commission (SEC) released the Fails to deliver (FTD) data for the first half of August 2021. Shockingly the number of fails to deliver for this particular stock has increased to more than 1000% in August.
The SEC releases FTD data every fortnight and technically all these FTD shares have to be bought back from lit exchanges. But recently, 60% – 70% of daily trades are being conducted off-exchange, mainly in darkpool. SEC’s newly appointed Chairman Gary Gensler has taken this matter into consideration and often has expressed his disapproval on such practices.
In a recent interview with Barron’s, Gary Gensler said that a full ban of payment for order flow is “on the table.” Payment for order flow is a practice where brokers send trade orders to market makers that execute those trades in return for a portion of the profits. And Market makers don’t necessarily process these trade orders on lit exchanges.
Retail traders from Reddit have been watching these FTDs very closely. And every time SEC publishes fresh data, the number of FTDs for AMC have been on the rise.
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