Oct. 30, 2022
Comments for S7-06-22 Position Reporting of Large Security-Based Swap Positions Thank you for taking the time to review all comments submitted by concerned individual investors. To begin, I'd like to voice support for the transparency and public disclosure of Large Security-Based Swap Position data. I cannot stress enough how concerning that excessively large swaps are a threat to financial and national stability. These needlessly and incredibly high-risk positions are a "time bomb" that need to be revealed as soon as possible to protect economic balance. It is my hope to see more rules regarding public disclosure of financial data in the future. I respectfully request that the threshold be lowered to $100/$200 Million gross. Currently, the rule prohibits spreading a large swap position out to evade this threshold, I believe this will still be done and I do not have the confidence that the SEC may be in a position to detect such actions. By providing the public with more data and slightly lowering this threshold, more fraud may be detected by those interested in combing through such information. This would in turn build a protective layer of security by those interested in shielding the financial health of the public for the very people who are at risk to it, the individual investor/retailer. In this sense it would act as an open source system of security of and by the people. As a result, this would assist the SEC in doing its job of enforcing the financial rules of the system. It is important that this rule be hardened against evasion against multiple actors colluding to build a large position through separately acquiring smaller positions that would evade the reporting requirements. I do not want to see a rule watered down in practice. I support this rule both domestically and internationally so that funds and firms cannot use borders to evade the rules of the market. I would encourage that the commission investigate entire swap portfolios instead of just parts. The Commission should follow the precedent in Rule 13h-1, "Large Traders" using the trader's entire position in all NMS securities. Looking at the overall picture of a trader's portfolio for excessive risk via swaps is the best way to accurately determine total risk. Anything less than this, I believe, would go against the spirit of this rule and goes against the Commission's prior rulemaking. To build upon the inspection of entire portfolios, the Commission should also include all security-based swaps based on the same underlying security or reference entity, regardless of whether they are debt or equity-based, including CDS. This is to prevent the same sort of evasion or reporting requirements by using different types of complex financial instruments and strategies. I agree with the definition of security-based swaps and that it must be appropriately wide to minimize evasion. I agree with daily reporting and praise the Commission's public release of swap data. This empowers citizens to protect themselves from risk and the companies they own from hostile actors. The Commission should utilize its authority under Section 10B(d) of the Exchange Act to publicly release data. Fraud is widespread, and the resources of the SEC are limited. By allowing people to see potentially dangerous swap activity, they will be better able to assess the investments they make and observe the dynamics of the market. A more level playing field is absolutely in the public's best interest. The damage that can be done via swap activity necessitates that investors be equipped to defend themselves and the market they use. A healthy market is an informed market. I implore the SEC to finalize the rule as soon as possible. Thank you, Daniel Abad Jr.