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Comment for Proposed Rule 75 FR 76706

  • From: Kim Kahl
    Foremer Federal Whistle-Blower

    Comment No: 26662
    Date: 12/8/2010

    Comment Text:

    I am MUTE if you must call leave a detailed message with a email address and POC to contact back.
    subject line: ALGORITHMIC STUDY

    First I chose the answer these questions to help your agencies do a better job: after reading the supplementary information I would suggest abbreviating "standardized and extensible legal definitions [SELD]:

    1. How would your org or community define "net exposures to complex derivatives?" assets which are spendable only when dervisifed
    2. Do you calculate net expsures to somplex drivatives? Yes, and you have to keep funds in reserve to cover unexpected expenses
    3. What data do you require to calculate net exposures to complex derivatives? all funds and current interest rates of each complex derivative. Does it depend on the derivative type? Yes is the derivative an asset with high liability How? perisable, durable and what type of long term equitiy is build into it.
    4. Are there any difficulties associated w/ your ability to gather the data needed to calcuate net exposures to comples derivatives [CNETCD]? What are they? Yes, if the parties involved refuse to disclose hidden assets it will affect the net receivables.
    5. What other analyses would you like to perform on derivatives aggreements? What kinds of analyses would you like to perform, and how could regulation adn standards makethose analyses possible? I currently don't, but if I were to I would check to see which derivatives did well in the previous quarter/year/decade and which were/are in danger of collapse.
    6. How often do you perfom nex exposure calculations at the level of your organization? Daily Is it continious and real time, only for periodic external reporting or some frequency in between? It has to be continious and it have to roll up weekly, then monthly, then quarterly and finally yearly.
    7. Do you rely on a descrete set of computer-readable descriptions ("ontologies") to define and describe derivatives transactions and positions? yes If yes, what computer languages do you use? Various off the shelf and open source MicroSoft/Novell/NT/CTOS and DOS languages.
    8. If you use one or more ontologies to define derivatives transctions and positions are they proprietary of open to the public? Are they used by your counterparties and others in the derivatives industry? NT, and CTOS programs are proprietary to the US Federal Government and used only by Federal Government employees.
    9.How do you maintain and extend the ontologies that you use to defin derivatives? Stay curent on computer software when a new financial derivative product is offered track it's data. New terms, concepts and definition are generally offered every three to five years.
    10.What is the scope and variety of derivatives and their positions covered by the ontologies that you use to describe derivatives? All ontologies can be set up to track individual derivatives/ the only limitations are undisclosed assets and unaccounted for liabilities.
    11. How do you think any limitations to the ontologies you use to describe derivatives can be overcome? Check to be sure thantologies account for each asset and liability and insure the fund; diversify when it becomes a liablilty.
    12. Are these ontologies able to describe derivatives transactions in sufficent detail to enable you to CNETCD?As long as they accurate and truthful any complex derivative can be tracked
    13. Are these ontologies able to describe derivative transactions in sufficient detail to enable you to perform other analysis? They should be if they are set up correctly. Any type of analysis can be compiled, but you need to be sure the information is correct when originally complied
    14. Which id regimes, if any do you use to id counterparties, financial instruments, and other entities as part of derivative contract analysis? a simple example/ you have a complex derivative of recycleable paper and you want to expand the derivative to include plastic as well / you will need to see what the market will bare for other recycled products without creating a monoply - I will finish the remainder of the questions after a break as i do not want to exceed your comment text limit.

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