Comment Letter

MFA submitted a letter today to the SEC in response to its request for comments on the proposed large trader reporting system. In our letter, MFA generally supports the proposed large trader reporting system as a mechanism that will assist the SEC with its efforts to detect and deter fraudulent and manipulative activity and other trading abuses; however, we suggest some clarifications and revisions to the proposals that we believe would lead to greater efficiency and efficacy of the proposed system. Specifically, in our letter: (i) we suggest that the SEC implement its proposed consolidated audit trail instead of the large trader reporting system, since the large trader reporting system is intended as an interim measure; (ii) we ask the SEC to reconsider the proposed identifying activity level thresholds as we believe the thresholds would inadvertently capture a number of infrequent large traders; (iii) we seek clarification on the application of the large trader ids to the typical hedge fund manager structure; (iv) we request that the SEC amend the proposal to impose affirmative confidentiality requirements on dealers; and (v) we suggest that the SEC consult industry participants to develop protections against theft and misappropriation of data received by the SEC related to the proposed large trader reporting system.