Feb. 7, 2022
Summary: Overall, I am strongly in favor of implementation of this proposed rule regarding "Prohibition Against Fraud, Manipulation, or Deception in Connection with Security-Based Swaps; Prohibition against Undue Influence over Chief Compliance Officers; Position Reporting of Large Security-Based Swap Positions" ---- Of note I disagree, on page 174, with the paragraph including the terminology: 6. Threshold Alternatives for Credit Default Swaps An alternative approach to the public reporting requirement in Rule 10B-1 would be to consider different methodologies for calculating the reporting thresholds for single-name CDS. When considering different reporting methodologies for single-name CDS, the Commission also could consider proposing... A single gross threshold that would require single-name CDS trading entities to report their exposure and related holdings after the entity exceeds a certain level of their aggregate CDS exposure for a single underlying entity without accounting for offsetting deliverable securities. For example, even if a CDS market participant were net neutral (i.e., no directional exposure), because it has large exposures both in the long and short direction it would have to reveal this information to the market at certain thresholds.... ... (other alternatives) I disagree with any such "carve outs" and certain defined limits to continue being able to hide swaps and hidden information. Enough is enough. As soon as there is a carve out or loophole in this rulemaking process, guess who is going to exploit it? The "big boys" against "the little man." If there are to be swap disclosures for transparency - let there be full transparency. Bring more light into the dark pools and corners of the market. In the long run, it will be better for both institutional and retail investors to have more equal access to all the information. It may even be more profitable! Once upon a time in this country, early in the railroad industry, it was thought that having brakemen running across the rooflines of trains to turn wheels to slow down the trains was fine. Sure, many brakemen fell off the train and died, but that was just the cost of doing business. Eventually, George Westinghouse invented the airbrake system to allow an end to the ridiculous "standard industry practice" of killing brakemen. Railroads initially fought hard against requiring airbrakes as it was "too expensive" and would "disadvantage their business." Eventually, railroads were forced to use airbrakes. And guess what? The railroad system ran better than ever, profits soared for railroaders and shippers alike. More transparency and legitimately retail friendly practices will be better for all parties, and S7-32-10 is a rulemaking move in the right direction!