December 16, 2021
Good morning commission, thanks for reading.
In my opinion, increased transparency on security based swaps are important. As you know, credit derivatives such as swaps can have extreme influence on the price action on any security. The lack of accurate reporting puts retail investors like myself at a fundamental and critical disadvantage compared to what could be considered a 'fair' market.
How would a trader like myself be able to discern legitimate price action caused by trading in the underlying from that created artificially via swaps if we arent informed whether or not those swaps exist on any security? In addition, how can we know the potential impacts they may have on the supply and demand of the security or asset of these swaps are not displayed? It is impossible to have fair markets when key information is withheld from the public eye. Finally, the opacity of these derivatives allows for an illegitimate amount of leverage to be applied to positions that otherwise would not be allowed or even possible with the outstanding count of underlying. This can lead to idiosyncratic scenarios, as we are all aware.
We are seeing the extremes of these derivatives play out before our eyes in certain securities, and it should be clear to all parties that without clear and transparent market structure, retail investors will never be able to invest in US based securities with confidence again
Thank you again for your time, and I look forward to seeing this resolved.