Comment Letter on CFTCs Proposed Rule Related to Requirements for Derivatives Clearing Organizations, Designated Contract Markets, and Swap Execution Facilities Regarding the Mitigation of Conflicts of Interest

November 17, 2010

From: MFA, Stuart Kaswell

To:

David A. Stawick, CFTC
Gary Gensler, Michael Dunn, Bart Chilton, Jill Sommers, Scott O'Malia (all CFTC)

On November 17, MFA submitted a comment letter on the CFTCs proposed rule related to Requirements for Derivatives Clearing Organizations, Designated Contract Markets, and Swap Execution Facilities Regarding the Mitigation of Conflicts of Interest. In our letter, MFA recommended that the CFTC: (i) impose requirements that affirmatively limit the representation of clearing members on DCO, DCM and SEF Boards and committees to a percentage that is less than what would constitute control under those entities corporate constitutive documents; (ii) make it explicit that all members of the Board of a DCO, DCM or SEF have a fiduciary duty to such registered entity; (iii) require DCOs, DCMs and SEFs to provide to the CFTC detailed minutes of all Board, committee and subcommittee meetings as well as make publicly available all Board and committee charters, procedural rules and similar documents and the identities of Board and committee members subject; and (iv) craft ownership limitations for DCOs and structural governance limitations for DCMs and SEFs to ensure that clearing members or founding owners do not have sole control or an overriding profit sharing motivation to support one DCO, DCM or SEF at the expense of another.

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