July 18, 2023
Good morning,
Swaps like any positions taken by participants in the market should be disclosed to the SEC. The SEC's mission to promote fair markets can not be completed if they are unaware of potential market risks until after they have occurred.
With the increased derivative trading that occurs within the market, and the interconnectedness of all participants, swaps do not in fact minimize risk through diversification. They in fact increase it to where if one major participant fails the entire system becomes exposed.
The SEC must be proactive in preventing market turmoil by regulating the markets in a way that minimizes the risk of the majority when minority actors lose money with their risky bets. We need to limit privatization of profits with the socialization of losses.
The minimum requirement for reporting any asset or debt bases swap or position should be $0 USD, or any other legal fiat currency in use.
The daily reporting of any and all positions should be required by law to be submitted automatically on a daily basis.
The ownership of such positions being by either parent companies or child entities should not create any exemptions on reporting asset, swap or debt positions on a daily basis.
Any company and it's subsidiary(ies) should each be forced by law to report any and all positions without any exemptions regarding the legal entity of the subsidiary or residency as long as they operate on United States soil in regulated or unregulated markets/exchanges.
Both traditional assets should be reported along with digital assets positions without exemptions.
Any position that holds a monetary value, positive or negative, should be reported. These reports should be total positive and negative values not \"net\" positions. The reports should indicate both the long and the short position so to not bypass any loopholes or technicalities with hiding high risk assets through zero balanced positions through subsidiaries, shell or shelf companies as global financial system participants are doing these days through so called \"offshore safe haven\" countries with questionable reporting and fraud/securities laws.
Any change in position size, positive or negative, should be reported automatically by the end of business day.
As mentioned before, nearly everything is automated through computer systems, high speed trading and networks, having EDGAR filings be done at the end of business days should have been a legal requirement years ago.
Any complaints about the amount of hours lost processing these transactions should disregarded. The goal of a market is to be fair not to be fast. If we are going to compromise on one or the other it must be speed of transactions that suffer so that the true economic principles of supply and demand are met.
The calculations in costs regarding spent hours should be firstly considered as a ploy to calculate a human doing the work while the entire system is automated and only a fraction of the cost to implement basic new features should be considered.
As most financial participants employ their own IT departments, these costs to implement reporting requirements should be considered as \"cost of doing business\" as they make hundreds of millions and billions of profit per year and are more happily paying millions of fines regarding financial malpractice as defined by FINRA rules then spend a fraction on abiding the law set forward in this rule by implementing some new computer code.
The commission should take a zero stance against non-reporting of financial assets, both positive or negative, traditional or digital.
All positions should be reported separately per legal entity/owner without exceptions.
With all the new rules proposed to make the financial system more transparent and fair for ALL market participants, this reporting rule should be set without a threshold and at the end of any business day that a position was opened, modified or closed.
The fines for violating these rules should be equal to the position taken by the participant. per violation and be on public record so that any participants doing business in the United States are aware of the trustworthiness of intermediaries or partners that they are interacting with. This will rebuild trust in the financial system.
The commission should also take this opportunity to help and/or guide other country financial system regulators to help them create more transparent and fairer markets as the problem is not restricted to the United States of America.
Best regards