Jul. 21, 2023
Dear Sir/Madam, I hope this message finds you well. As we discuss the intricacies of the financial system, it is essential to prioritize transparency and fairness for all market participants. I believe that hiding swaps would be unjust, and therefore, I advocate against any such measures. Regarding the Reporting Threshold Amount memorandum, which currently sets the smallest reported swap value at $70 USD, I strongly oppose any attempts to conceal swaps. Transparency is the cornerstone of a healthy financial market, and I propose that there should be no minimum requirement for reporting any asset or debt-based swap or position. All transactions, regardless of their value, should be reported and disclosed promptly and transparently. Daily reporting of all positions should be a legally mandated requirement, and it should be done automatically on a daily basis. There should be no exceptions to this rule, regardless of ownership by parent companies or subsidiary entities. Both traditional assets and digital asset positions must be reported without any loopholes or exemptions. To ensure full disclosure, any position with a monetary value, whether positive or negative, should be reported separately, indicating both long and short positions. This will prevent any attempts to hide high-risk assets within zero-balanced positions or subsidiary companies. Additionally, measures must be taken to address the misuse of "offshore safe haven" countries with questionable reporting and securities laws. Any change in position size, whether positive or negative, should be automatically reported by the end of the business day. Given the significant automation in the financial industry through computer systems, high-speed trading, and networks, it is essential that EDGAR filings are required at the end of each business day. Addressing concerns about processing time, efforts should be focused on improving and optimizing automated systems rather than relying on human labor. Financial participants should take responsibility for complying with the law and implementing necessary computer code, rather than resorting to fines for malpractice. Enforcing a strict stance against non-reporting of financial assets, whether traditional or digital, is imperative for a transparent and fair market. All positions should be reported separately, identifying the legal entity/owner, without any exceptions. To foster transparency and fairness for all market participants, reporting should not have any threshold, and it should be required at the end of any business day when a position was opened, modified, or closed. Furthermore, penalties for violations of reporting rules should be significantly increased to serve as a deterrent. Penalties should be proportionate to the value of the unreported position, and all information on violations and corresponding penalties should be made publicly accessible. This will build trust within the financial system and promote ethical practices among market participants. As we address these issues, it is crucial for the commission to serve as a guide and collaborator with other countries' financial system regulators to establish more transparent and fair markets globally. Thank you for your attention to this matter. Best regards, Mike Gilbert