MFA-AIMA Follow-up Letter on SEC CDS Customer Portfolio Margining

On September 18, MFA and the Alternative Investment Management Association (AIMA) submitted a joint follow-up letter to Mr. John Ramsay, Acting Director of the SEC’s Division of Trading and Markets (Division), to explain buy-side concerns with the Division’s requirements for approving individual broker-dealer/futures commission merchant (BD/FCM) margin methodologies for the cleared credit default swap (CDS) customer portfolio margin program.  The letter requests that the Division make permanent its six-month uniform customer margin level as formulated in its June 7, 2013 letters to eight registered BD/FCMs.  Not only would the permanent adoption of this approach be more efficient for the SEC and FINRA staffs to administer, it would also facilitate the Dodd-Frank Act’s clearing reforms by removing the unintended impediments to single-name CDS clearing and customer access to the CDS portfolio margin program.

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