Comment Text:
To the CFTC,
I am a retail investor with deep concerns about the unchecked use of perpetual Total Return Swaps (TRS) and other synthetic short vehicles that enable large institutions to suppress equities like GameStop (GME) outside of public scrutiny.
Perpetual derivatives create artificial selling pressure without triggering mandatory closeouts under Reg SHO, bypass short interest reporting, and avoid CAT reconciliation, all while institutions maintain infinite roll-forward exposure.
Examples like Archegos Capital (2021) revealed how hidden swap positions can distort markets and pose systemic risk — all without triggering alarms until it’s too late. Today, this is happening again under the radar.
Specifically, I urge the CFTC to:
a) Mandate public disclosure of all TRS and similar OTC contracts tied to U.S. equities.
b) Implement margin tightening and duration limits on perpetual contracts to avoid endless short pressure loops.
c) Require integration with CAT (Consolidated Audit Trail) and Reg SHO to identify and reconcile synthetic short interest with real market activity.
As a retail participant, I cannot compete with institutions that effectively short equities indefinitely through opaque instruments — which erodes market transparency, price discovery, and investor confidence.
This loophole must be closed. Please regulate perpetual derivatives before they trigger another Archegos-like collapse — or worse, irreversibly damage public trust in our capital markets.
Respectfully,
Kien Nguyen
