MFA and AIMA Submit Comments to CFTC on Cross-Border Guidance

August 28, 2012

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Topics: CFTC Commodity Futures Trading Commission, interpretive guidance, swaps, Alternative Investment Management Association, AIMA, financial crisis, over-the-counter derivatives, OTC derivatives, OTC derivatives market, hedge fund industry, fund of funds, hedge fund managers, prime brokers, hedge fund administrator, market participants, non-U.S. market participants, regulatory requirements, commodity pool, pooled accounts, collective investment vehicles, non-U.S. investment fund, Securities and Exchange Commission, SEC, international harmonization of regulations, regulatory framework, duplicative regulation, transaction cost, compliance costs, U.S. person, non-U.S. persons, derivatives, derivatives markets, Corporation, partnership, limited liability companies, joint-stock company, fund, pension plans, estate, Trust, income tax, Jill Sommers, Scott O'Malia, cost-benefit analysis, market impact, third country, European Securities and Markets Authority, ESMA, direct or indirect ownership, Look Through, shareholders, listed entity, foreign banks, banks, dealers, commodity pool operator, CPO, Form CPO-PQR, financial stability, financial system, chief compliance officer, risk management, swap data recordkeeping, swap data reporting, commodity swaps, clearing, swaps processing, margining, segregation, uncleared swaps, execution, portfolio reconciliation, real-time public reporting, trade confirmations, Business Conduct Standards, qualified eligible person, accredited investors, general partnerships, registration, CPO registration requirements, counterparties, swap dealer, major swap participants, MSPs, swap data repository, sell-side firms, buy-side firms, entity-level requirement, reporting party, comment letter, transaction-level requirements, majority ownership, G20, G20 commitments, substituted compliance, transparency, Policy Makers, European Parliament, Council of the European Union, Hong Kong, Hong Kong Monetary Authority, Securities and Futures Commission, Monetary Authority of Singapore, Singapore, International Organization of Securities Commissions, IOSCO, Department of the Treasury, natural person, foreign entity, Dealer, fiduciary, International Monetary Fund, International Bank for Reconstruction and Development, Inter-American Development Bank, Asian Development Bank, African Development Bank, United Nations,
From: MFA, Stuart Kaswell; AIMA, Jiří Krόl

To:

David Stawick, CFTC

MFA and AIMA jointly submitted a comment letter to the Commodity Futures Trading Commission (“CFTC”) on its “Proposed Interpretive Guidance and Policy Statement on Cross-Border Application of Certain Swaps Provisions of the Commodity Exchange Act”.  In the letter, MFA and AIMA expressed concern with the proposed “U.S. person” definition and its application to non-U.S. funds.  In particular, MFA and AIMA advocated for the CFTC to modify the proposed guidance to instead adopt the definition of “U.S. person” in Regulation S of the Securities Act of 1933.  In the event that the CFTC did not adopt that definition, MFA and AIMA also suggested amendments to prongs (ii), (iv) and (v) of the proposed “U.S. person” definition to ensure that it functions appropriately in the fund context.  Lastly, MFA and AIMA urged further coordination between the CFTC and other U.S. and international regulators to avoid duplicative regulation and to address issues related to the practical details of how substituted compliance will work in practice.

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