Aug. 2, 2023
Good morning, I wholeheartedly support the proposed rule and commend the efforts to prevent evasion of reporting regulations. Transparency and public disclosure of data are crucial aspects that I strongly advocate for. I am concerned about the risks posed by excessively large swaps, which could potentially threaten both financial and national stability. I urge thorough investigations into entities like Archegos Capital Management and other hidden risks that need to be exposed as soon as possible. In the interest of detecting fraud more effectively, I propose lowering the threshold for reporting to $100 million / $200 million gross. Although the current rule aims to prevent spreading large swap positions to evade reporting, it may still happen, and the SEC might not always be able to detect it. By providing the public with more comprehensive data and slightly lowering the threshold, we increase the chances of detecting such fraudulent activities. It is vital to fortify the rule against evasion, such as collusion among multiple actors to build large positions through separately acquiring smaller ones that evade reporting requirements. We must avoid diluting the rule's effectiveness in practice. I also support the global application of this rule, ensuring that funds and firms cannot exploit borders to evade market regulations. When determining reporting requirements, it is essential to consider the entire swap portfolio, not just individual parts. This comprehensive approach helps identify excessive risk-taking and ensures compliance with the rule's spirit. The definition of security-based swaps must be appropriately broad to minimize evasion. I endorse the concept of daily reporting and commend the Commission's decision to make the data public. By empowering citizens with information about potentially dangerous swap activities, they can better protect their investments and the companies they own from hostile actors. I strongly recommend that the Commission utilizes its authority under Section 10B(d) of the Exchange Act to publicly release data. With fraud being a widespread issue and the SEC's resources limited, allowing the public to access swap activity data will create a more level playing field and enable investors to defend themselves and the markets they engage with. In conclusion, I believe the SEC should promptly finalize this rule, considering its importance in safeguarding financial markets. Best regards. Denis Kovacevic Switzerland