Subject: S7-32-10: Webform Comments from K. Mitnick
From: K. Mitnick
Affiliation:

Aug. 13, 2023

To Whom It May Concern,

I am writing to express my firm endorsement for the prompt adoption of
Rule S7-32-10, mandating the public disclosure of all positions in
security-based swaps (SBS). I firmly believe that this regulation is
vital in averting potential future financial crises and in
establishing an equitable and open market environment.

In my personal opinion, a just market hinges on complete transparency.
Concealing or clouding market positions serves no purpose unless there
are questionable motives involved. Every swap position must be
promptly disclosed immediately following its agreement or execution.
The criteria for disclosure should be straightforward – all swaps
must be comprehensively reported. This includes detailing positions,
counterparties, and the terms of the agreement. Modern technology
facilitates thorough supervision by regulatory bodies, thereby
proactively preventing forthcoming financial turmoil. Swaps are akin
to financial instruments of massive impact. The delayed reporting has
already incurred substantial financial losses running into billions to
trillions of dollars over recent years, and this is entirely
preventable and manageable (examples: SVB, Signature Bank, FTX, etc.).
I am wholeheartedly in favor of stricter reporting protocols and
advocate for immediate public reporting of all swap positions along
with complete accompanying information. Transparency in the market is
of utmost importance. Concealing positions and data from market
participants only perpetuates an uneven field, fostering an unjust
advantage that leans towards Wall Street.

The Managed Fund Association's (MFA) alternative proposal is
merely another endeavor to shield their risky misconduct from public
scrutiny. I firmly hold that all SBS positions, irrespective of size,
should be openly disclosed without any exceptions to this directive.
This move would significantly enhance both investor and regulator
comprehension of market risks, thereby preventing the sort of market
manipulation that culminated in the 2008 financial crisis.

Lastly, I am of the belief that the penalties for breaching this
regulation should be substantial. I recommend that transgressors be
compelled to liquidate their positions, have their licenses revoked,
and face a lifelong prohibition from engaging in the financial
industry. This would unequivocally convey the SEC's earnest
commitment to enforcing this rule and its zero tolerance for market
manipulation.

I beseech the SEC to promptly enact Rule S7-32-10 and fortify it to
the utmost extent possible. This rule is indispensable in safeguarding
investors and fostering a fair and transparent marketplace.

Yours sincerely,
A concerned Household Investor