MFA submitted a comment letter to the Prudential Regulators in response to their notice of proposed rulemaking on Margin and Capital Requirements for Covered Swap Entities. In our letter, we explained how the proposed capital and margin affect buy-side firms. We also urged the Prudential Regulators to issue margin requirements that promote a fair and stable market for uncleared swaps and to coordinate their margin rules with the SEC and CFTC. In addition, we strongly encouraged the Prudential Regulators to require prudentially regulated swap dealers and major swap participants (CSEs) to post and collect variation margin. We expressed our belief that it is critical that the Prudential Regulators permit CSEs and financial entities to net across many different exposures and assets. We also made comments related to: (i) ensuring initial margin models used by CSEs are objective; (ii) revising the proposed Grid-Based Method for calculating initial margin to properly account for the variety of swaps; (iii) the ten-day liquidation time horizon for initial margin requirements; (iv) clarifying the proposed swap documentation requirements; and (v) capital treatment for cleared swaps.