Jul. 21, 2023
Dear Commissioners, I am writing to express my strong support for the proposed rule, S7-32-10, aimed at preventing fraud in reporting for large security-based swaps. As a concerned participant in the financial markets, I believe that increased transparency and reporting requirements are essential to fostering fair, efficient, and trustworthy markets for all participants. The financial system employs highly qualified employees and complex computer systems, connected to numerous official and non-official exchanges, including cryptocurrencies and off-book digital asset swaps. In light of the Reporting Threshold Amount memorandum, which revealed that the smallest reported swap is $70 USD, I believe that the minimum reporting requirement for any asset or debt-based swap or position should be set at $0 USD or any legal fiat currency in use. All positions, both positive and negative, traditional or digital, should be reported separately per legal entity/owner without exceptions. I support the call for daily reporting of any and all positions, which should have been mandated by law years ago. Such reporting should be submitted automatically, without exemptions based on the legal entity of the subsidiary or residency, as long as companies operate on United States soil in regulated or unregulated markets/exchanges. Aggregation of data in securities reporting or swap reporting should be avoided, as it can hinder market participants from understanding trading patterns and strategies, and may conceal impropriety. Instead, clear, specific, and direct language should be implemented to ensure timely access to security swap reporting for all market participants, enabling effective financial decision-making. The recent incidents in the financial markets, such as the Archegos situation, demonstrate the need for proper and judicious reporting of swaps. Timely and transparent reporting could help prevent similar occurrences in the future, safeguarding market stability and investor interests. I concur with the assertion that less reporting does not benefit market participants, particularly individual investors who deserve equal access to reporting data on the securities they own. Transparency is crucial for building trust and confidence in the financial system. By reducing reporting, we risk creating an unfair advantage for certain market participants, which could lead to market instability and erode public trust. In terms of the associated costs of implementing these reporting requirements, it is essential to recognize that the financial participants make substantial profits each year. Therefore, costs associated with compliance should be viewed as a necessary part of doing business and not an undue burden. It is vital that the fines for violating reporting rules be significantly increased to serve as a powerful deterrent against non-compliance, thereby promoting a culture of accountability and responsibility in the financial industry. I urge the commission to take a strong stance against non-reporting of financial assets and to assist other countries' financial system regulators in developing transparent and fair markets. By setting a reporting rule without a threshold and requiring daily submissions of positions, we can create a more level playing field and foster trust among all market participants. Thank you for considering my comments on this crucial matter. I trust that the SEC will make decisions that prioritize transparency, fairness, and the long-term stability of our financial markets. I appreciate your efforts to protect the household investors and ensure the integrity of our financial system. Sincerely, A M