https://wccftech.com/given-critical-transaction-clearing-rule-changes-gamestop-and-amc-investors-have-already-won-but-another-short-squeeze-may-become-more-difficult-now-in-light-of-the-declining-short-interest/

GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC) changed the rules of the game earlier this year when, as a result of a violent retail-driven short squeeze, hedge funds suffered massive losses to their short positions in these stocks. However, in light of the moderating short interest in GameStop and AMC, a repeat of the spectacular price explosion in these meme stocks may yet become quite difficult. This episode, nonetheless, marks a seminal moment when retail investors forced regulators to implement critical changes to the market’s structure.

First, the Depository Trust and Clearing Corporation (DTCC) approved a critical rule change on the 17th of March. To wit, the rule now allows for an instantaneous inquiry of a fund’s positions, necessitating a balanced money flow on the part of these institutional investors. More significantly, the DTCC aims to change the time to the settlement of a transaction from the current T+2 days (two days after the initiation of the transaction) to T+1 day in the next two years. This reduction in settlement times will not only reduce the clearinghouse margin requirements but also decrease the counterparty risk in settling transactions. While the latter rule change is important for the overall market efficiency, the former is more important when it comes to preventing large institutional investors from gaming the system. Obviously, these rule changes would remove some of the lacunae that GameStop and AMC retail investors on the WallStreetBets Reddit forum have been railing against.