Jul. 21, 2023
To the Securities and Exchange Commission, I am writing to express my support for the proposed rule on position reporting of large security-based swap positions (S7-32-10). I believe that this rule is necessary to enhance transparency, accountability, and fairness in the financial markets. Security-based swaps are complex and risky instruments that can have significant impacts on the prices and liquidity of underlying securities. They can also pose systemic risks to the financial stability of the market and the economy. Therefore, it is vital that the SEC and the public have timely and accurate information on the size, composition, and ownership of large security-based swap positions. I agree with these provisions and urge the SEC to adopt them without delay. I also suggest that the SEC consider lowering the reporting thresholds to capture more swap activity and increasing the frequency of public dissemination to provide more timely data. While the rule prohibits things like spreading a large swap position out to evade the threshold, this will be done and the SEC may or may not be in a position to detect it. By providing the public with more data, and slightly lowering the threshold, more of this fraud may be detected. It is important that the rule be hardened against evasion (e.g. by multiple actors colluding to build a large position through separately acquiring smaller positions that evade reporting requirements). We do not want to see the rule watered down in practice. Furthermore, I recommend that the SEC coordinate with other regulators, both domestic and international, to ensure consistent and comprehensive reporting of security-based swaps across different markets and jurisdictions. The commission should take a zero stance against non-reporting of financial assets, both positive or negative, traditional or digital. All positions should be reported separately per legal entity/owner without exceptions. With all the new rules proposed to make the financial system more transparent and fair for ALL market participants. The fines for violating these rules should also be increased to be at least ten fold the value of the not reported position, per violation and be on public record so that any participants will be able to do business in the United States with trust worthy intermediaries or partners to rebuild trust in the financial system. Data should not be aggregated, whether in securities reporting or swap reporting. The common argument that it prevents participants from determining trading patterns or strategies is an excuse to keep the data from regulators and those that might otherwise report impropriety. The Commission should absolutely 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 the 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 interest, and the damage that can be done via swap activity (e.g., Archegos) necessitates that investors be equipped to defend themselves and the markets they use. The proposed rule would benefit the market participants and the public by providing more transparency and accountability in the security-based swap market. It would also help the SEC to monitor and enforce compliance with existing rules and regulations, such as those related to short selling, insider trading, market manipulation, and fraud. Moreover, it would enable the SEC to identify and address potential risks and threats to the market integrity and stability. I appreciate the opportunity to comment on this important proposal. I commend the SEC for its efforts to enhance the regulation and oversight of security-based swaps. I hope that the SEC will finalize and implement this rule as soon as possible. Sincerely, Individual Investor