Comment Text:
Your request for public comment describes an intent to implement a "procedure to confirm the accuracy of swap data with both counterparties to a swap." The first thing necessary in order to do this effectively is to acquire the informed consent of both counterparties from the onset. We have now hard more than ten years of swap deals using futures contracts that also include ones that were originally some other form of "agreement" to which a participant consented at the time. For someone to then take this agreement, "sell it" even after anonymization, and use it for other purposes is NOT obtaining and engaging processes with informed consent.
I say this with a disclosure that today is ten days after six months following a report to the Senate Armed Forces Committee concerning the Army Futures Command. That the deadline for this request for public comment ends today is no coincidence. I am concerned that the Army Futures Command uses derivative agreements and "swaps," including connected to "real-time" reporting via derivative, that without informed consent and appropriate determination and calibration can engage concurrent transactions at levels of risk that are inappropriate and unsafe. There is no excuse that should be permitted for allowing any organization to engage in such practices, even those alleging to do so under the rubric of national security or national defense. In fact, using derivative agreements with what might otherwise be completely civilian entities in order to "launder" or disguise asset diversion for military or alleged "national security" purposes undermines domestic security and provides a serious misrepresentation of the actual value and security present within the U.S. and in regards to others with whom the U.S. engages in commercial activities.
This is important in specific regards to what is discussed as part of the information presented on the intention behind attempting to acquire these public comments. A major question emerges as to how much of the "data" that was acquired prior to the implementation date of the rules of concern is going to be available for swap. Historical references and contextualization can also include information that was previously accessible under other terms, previously characterized as "confidential" (or in some cases, "public information" that was later defined as "confidential"), or otherwise assessed value. This includes "use value" insofar as certain market participants made available data to which they had access in manners that may have effectively recharacterized it contrary to the manners in which it was originally offered. A lot of what was previously characterized, for instance, for one "person" as "debt" was used as "leverage" by another "person" without appropriate information about the actual potential value or the comprehensive consideration of terms of the original offer. The actual full potential value of and risks associated with that "data" depending upon its potential uses were undisclosed at the time the obligation was incurred or the relationship initiated. This has serious implications that cannot be ignored.
Conversely, much of what was previously offered as reports on fraud and malfeasance was recharacterized as "policy" updates without appropriate close out reports, prosecution for attendant crimes or restitution, or damage recovery for and acknowledgement of the reporters or the victims. This can impact other financial instruments backing the agencies to which those reports were initially filed. The "damage recovery" mentioned herein is not just about civil penalties and/or monetary compensation, but can also include defamation of character, obstruction of other forms of "market participation" that might have been beneficial both personally and socially, and a deficit in terms of demonstrable value in implementing law enforcement or regulatory compliance measures which in turn supports further efforts to prevent recurrences of fraud and other crimes. This deficit has domestic and international ramifications, especially if a swap is being conducted with entities that are beholden to other jurisdictional requirements concerning anti-money laundering efforts or have themselves been targeted or sanctioned regarding allegations of financial impropriety.
Considerations regarding "use of technology by comparable market participants" should be made accordingly. Indeed, this is where it becomes even more pertinent to assure that there is informed consent and prior disclosure in terms of the potential derivative uses for which one's data is used. Efficiency should not preclude conscientious application of necessary safety and security measures. One specific point to address is the proposed changes to the term "commercial use" specifying "to perform its regulatory responsibilities." This change can be potentially applied in manners that make available the process by which the regulatory participant is acquiring information to assess compliance for parsing out to selectively pass component information on or to adjust the characterization in the process, as if "negotiating" a characterization. If one considers this relative to the means by which such data is reported, then the possibility for "hacking" increases. So too does the possibility for fraud. Specificity in regards to any use of a swap needs to be established and maintained as a standard so as to prevent against its potential abuse. Confirmation of acceptance needs to be explicit and verifiable. Prosecution for abuses of these matters is essential to assure the long-term viability of such activities.
11:25 am CST
Jan. 27, 2020
Please note that again, I had to re-enter the "Validation Code" a second time, just as I did the last time I attempted a public comment for this agency. This lets me know that my accounts and efforts at a public comment are indeed being "proxied." I will not accept the second time but will try for a third.
