Aug. 21, 2023
Re: Reopening of Comment Period for Position Reporting of Large Security-Based Swap Positions S7-32-10 I strongly support this proposal and praise the effort in preventing evasion of the reporting rule. I strongly support transparency and the PUBLIC disclosure of this data. I am concerned that excessively large swaps are a threat to financial and national stability. Please look into Archegos Capital Management and other potential hidden "lurking bombs" that need to be revealed as soon as possible. I hope to see more rules like this in future. I request that the threshold be lowered to $100 million / $200 million gross. 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. I also support applying this rule internationally so funds and firms cannot use borders to evade the rules of the market. I suggest looking at the entire swap portfolio to determine reporting requirements, not just parts: "The Commission should follow the precedent in Rule 13h-1, which identifies "large traders" using the trader's entire position in all National Market System securities. The overall picture of a trader's appetite for excessive risk can only be formed by looking at their total swap position. Allowing large traders to take on excessive risk via swaps in many different individual securities while avoiding reporting requirements is against the spirit of the rule and goes against the Commission's prior rulemaking. The Security-Based Swap Position includes all security-based swaps based on the same underlying security or reference entity, regardless of whether they are debt (including CDS) or equity-based, so that funds and firms cannot evade reporting requirements by using different types of complex financial instruments. I agree with the definition of security-based swaps and it must be appropriately wide to minimize evasion. Thank you for your consideration and dedication, Adam Fouts