February 7, 2022
As a retail investor, I very strongly agree with the policy changes in this rule change. If anything, I am upset the part of this proposal was first put forward in 2010 and never enacted, resulting in the measures to prevent fraud, manipulation, and abuse in P9J-1 needing re-proposed now.
The addition of swaps reporting requirements and taking steps to protect the objectivity and independence of Compliance Officers are also extremely important in my opinion.
I have two thoughts regarding these new rules.
First, the kind of swaps positions abuse that this proposal intends to shine a light on was endemic prior to the financial crisis of 2008, and its extremely frustrating that rules along these lines were not put in place in the wake of billions of dollars being extracted from the American people and international investors. Late is better than not at all, as, if anything, since 2008 Wall Street has expanded and diversified the kinds of behavior that this proposal would apply to. Being able to abuse the system to profit off Amercians and American companies is terrible, but to be able to do so while hidden in the dark is completely unacceptable.
Second, I feel very strongly that the mere existence of swaps contracts and other derivatives like them creates an uneven playing field the same way that the hundreds of millions of dollars spent on high frequency trading systems creates an immense competitive advantage. I don't expect to ever see Wall Street restricted to the limited investing tools I might find offered by my brokerage, but the VERY LEAST I can hope for is to see the financial industry required to report that data, that data be accurate, auditable, and to have actual penalties for problems with that data. All too often, malicious actors on Wall Street are allowed to flaunt the rules and regulations, self-report fraudulent data, and then get away violation after violation with just paying a fine and admitting no fault.
If the penalty for breaking a rule is less than the profit, and there are no other repercussions, then the fine becomes just the cost of doing business.
I hope to see these rules enacted, as quickly as possible, and hopefully strictly enforced, with severe penalties and criminal charges for the individuals violating them.
In all honesty, I do not often feel like the SEC is actually looking out for me, the individual investor, and for the first time in a long time I see this proposal as addressing one of the most flagrant and harmful abuses that goes, for the most part, unnoticed by the general public. Thank you.