Jul. 24, 2023
Good day, In consideration of the proposed rule by the SEC, it is imperative to acknowledge the financial system's utilization of highly skilled personnel and sophisticated computer systems, interconnected with multiple official and unofficial exchanges, including crypto and off-book digital asset swaps. Addressing the findings of the Reporting Threshold Amount memorandum, which reveals the smallest reported swap as $70 USD, I advocate for a fundamental alteration: the minimum requirement for reporting any asset or debt-based swap or position should be set at $0 USD or any legally recognized fiat currency. It is my contention that the daily reporting of all positions should have been legally mandated long ago, with automatic submission being a standard procedure. The issue of ownership, whether by parent companies or child entities, should not serve as an exemption from complying with daily reporting laws regarding asset, swap, or debt positions. A crucial aspect of this proposal is that any company and its subsidiary entities, operating within the United States, be held accountable by law to report all positions without exception, regardless of whether they participate in regulated or unregulated markets and exchanges. This requirement must apply equally to traditional assets and digital assets, leaving no room for exemptions. Transparency is of utmost importance, and I firmly advocate for separate reporting of all positions holding a monetary value, be they positive or negative, thereby ensuring proper disclosure of both long and short positions. This measure is essential to prevent the manipulation of high-risk assets through concealed zero balanced positions within subsidiaries, shell companies, or so-called "offshore safe haven" countries with questionable reporting and securities laws. Moreover, it is crucial that any changes in position size, whether positive or negative, be promptly and automatically reported by the end of each business day. The automated nature of modern financial systems, including computer systems and high-speed trading, calls for a legal requirement of EDGAR filings at the conclusion of each business day, rather than waiting for human intervention. Any objections regarding processing hours and associated costs should be approached with skepticism. Given that financial participants maintain their own IT departments and generate substantial profits annually, the implementation costs for these reporting requirements should be viewed as a reasonable "cost of doing business" rather than a hindrance. In the pursuit of accountability, the SEC must adopt a zero-tolerance approach towards non-reporting of financial assets, encompassing both traditional and digital assets, regardless of their value being positive or negative. I emphasize the importance of reporting all positions separately per legal entity or owner, leaving no room for exceptions. To enhance transparency and fairness across financial markets and to rebuild trust in the system, I strongly recommend implementing this reporting rule without a threshold, requiring reporting at the end of any business day when positions are opened, modified, or closed. To effectively enforce compliance, the SEC should substantially increase fines for violations, setting them at a minimum of ten times the value of the unreported position, with all violations being publicly recorded. This measure will bolster trust between participants and reliable intermediaries or partners and extend beyond the borders of the United States, with the SEC offering support to other countries' financial regulators in promoting transparency and fairness. With unwavering regards, Guillaume Laroche