Comment Text:
Thank you for the opportunity to comment. As a retail investor, I'm extremely concerned about the integrity of our markets due to the manipulation and obscurity within our markets created by swaps. The synthetic exposure allowed by swaps allows institutions and hedge funds to hide their true positions and manipulate settlement, price discovery, and evade existing regulations.
Perpetual swaps should not be allowed to exist. Additionally, swaps should be required to be reported. There is a rule on the books for swaps to be reported that has been delayed by the CFTC year after year. Why? The swap market is hundreds of trillions of dollars. The swap market NEEDS to be made transparent for market participants to understand their own investments. If I wanted to invest in UBS, I would have no idea if they are even solvent because of your recent no-action letter allowing their legacy swaps to not maintain margin at current required rates. I understand they are too big to fail, but I have no idea if they are already insolvent, because you are allowing them to hide a massive hole in their balance sheet.
Archegos showed us the damage that these swaps could do when not reported. A single family office effectively took out Credit Suisse, one of the largest banks in the world, because of their swap positions. The CFTC allowing these swap positions to be hidden from the public is equivalent to letting the fox guard the henhouse. Not only is the CFTC negligent to this crime, but I believe the CFTC is complicit in the crime if they allow it to continue. You're a regulator. You have been tasked with regulating swaps. How can you regulate them when you don't have any information about them? A free market need to reporting requirements. A free market needs to end perpetual swaps. A free market needs to settlement to be enforced. A free market needs regulators who will regulate the large information-advantaged players from taking advantage of the investing public.
Please, be a regulator. And regulate.
Thank you for your time.
Andrew
