MFA submitted a supplemental comment letter to the U.S Securities and Exchange Commission (SEC) on the proposed rules regarding reporting and disclosure regulation of Large Security-Based Swaps. MFA advises the SEC to revise the 10B-1 rule, shifting its focus from public disclosure to regulatory reporting. Furthermore, MFA suggests a reassessment of whether the proposed rule serves the best interests of the public and effectively promotes efficiency, competition, and capital formation.
In the letter, MFA highlights their concerns that the proposed rules’ disclosure requirements, specifically related to the exposure of market participants’ intellectual property, trading strategies, and otherwise confidential investment positions. MFA emphasizes that such disclosures will impede the efficiency of the market across diverse asset classes.
MFA raises additional concerns regarding the potential adverse effects of the 10B-1 rule. The proposed rule is likely to cause a substantial decline in the utilization of security-based swaps (SBS) by market participants, leading to reduced liquidity and the creation of significant barriers for essential hedging transactions.
