February 7, 2022
As a foreign investor I am shocked to learn that fraud, manipulation and deception are permitted in connection with security-based swaps in the United States of America.
This, along with the vast majority of trades in the equity markets being routed to internalizers and the practice of payment for order flow being permitted has seriously shaken my confidence in the financial markets of the United States of America. The need for transparency in all aspects of US financial markets is increasing and critical to restoring investor confidence.
A prohibition against fraud, manipulation, or deception in connection with security-based swaps is so basic that one would reasonably assume this prohibition had existed and been enforced (in a manner rendering these practices unprofitable) as long as security-based swaps have. How can fraud be tolerated in a free and fair market?
The same can be said of undue influence over Chief Compliance Officers position reporting of large security-based swap positions. One cannot reasonably argue in favor of fraud, manipulation, deception or undue influence - by their very definitions they are contrary to free and fair markets.
The need for S7-32-10 to be implemented and prevent further abuses of swaps is immediate and I commend this Commission for taking the required steps to close this loophole.