Comment Text:
Good morning,
Firstly, thank you for taking the time to allow conversation on this very important subject and reading through our concerns via this public forum.
I think Chairman Christy Romero's comment posted at the following link sums things up better than I could as I am not privy to all pertinent information in the matter.
See here: https://www.cftc.gov/PressRoom/SpeechesTestimony/romerostatement062823
The potential new vertical integration of clearinghouses with the customer facing intermediaries will not promote market stability, investor protection, or reduced market risk. This new regulatory framework should not be implemented under any circumstances. It only serves to hand over the ability of substantially more risk and leverage to a vertically integrated (see: monopoly) clearinghouse, with a significant reduction in seeing both the level of risk and the ability of a naturally occurring disciplinary feedback mechanism to be in place.
Again, this new market structure and regulatory proposal should not be implemented in any fashion.
A quote from Romero's comment is especially prescient: "Our clearinghouse rules were not set up to protect customers, because they were written with the idea of a separate intermediary that interacted with customers and had regulatory obligations for customer protections."
Now that the intermediary is being eliminated, the regulatory rules in place for clearinghouses reduces protection for customers and allows abuse of investors through lack of investor protection. Without regulatory oversight and consumer protection, investors cannot have confidence in their market, which is essential for functioning markets. Aside from the lack of confidence, I believe we all understand that clearinghouses are not looking out for the customers and investors first.
Sincerely,
A concerned citizen and investor.
