Comment Text:
Dear Commissioner Romero,
I am writing to express my strong disagreement with the notion of considering vertical integration of clearinghouses with customer-facing intermediaries. After reviewing your statement, I find that the risks associated with such a structural change far outweigh any potential benefits.
In my view, vertical integration would not promote market stability, investor protection, or reduced market risk. Instead, it would centralize power and risk within a single entity, effectively creating a monopoly. This would lead to a significant reduction in transparency, oversight, and the natural disciplinary feedback mechanisms that exist in our current market structure.
Your statement suggests that the Commission is open to considering this new market structure. However, I firmly believe that this new regulatory framework should not be implemented under any circumstances. The proposed structure would eliminate essential checks and balances, thereby increasing the potential for abuse and reducing protections for customers.
Furthermore, the lack of competition in a vertically integrated model would be detrimental to market health. The traditional market structure has inherent checks and balances that promote financial stability. A move towards vertical integration would disrupt this balance, potentially leading to unchecked risks and decisions that prioritize the interests of the clearinghouse over those of the customers.
The absence of a discussion on the vertical integration of crypto platforms in your statement is also concerning. The crypto industry, being largely unregulated, should not serve as a blueprint for our regulated markets. The risks in the crypto space are real and significant, and mimicking such a structure in our commodities space would be ill-advised.
In conclusion, I strongly urge the Commission to reject the idea of vertical integration. The potential risks far outweigh any perceived benefits. We must prioritize the protection of investors and the stability of our financial markets above all else.
Thank you for your attention to this matter. I appreciate the opportunity to share my concerns.
Sincerely,
Trevor Panhorst
