Comment Letter on Clearing Agency Standards for Operation and Governance

MFA submitted a comment letter to the SEC on its proposed rules on Clearing Agency Standards for Operation and Governance. In our letter, we strongly urged the SEC to require clearing agencies that provide central counterparty services (CCP CAs) to adopt policies and procedures that are strictly determined by objective, risk-based criteria and that are subject to annual audit and transparency. We also recommended that the SEC require each CCP CA to make available to its customers its methodology for setting margin. We supported the SEC allowing CCP CAs to scale requirements for each clearing member, and recommended that CCP CAs determine such scaling by objective, risk-based methodologies that are based on reasonable stress and default scenarios. We advocated for making end of day settlement prices publicly available, free of charge. Lastly, we suggested the SEC require a number of structural features to further the goals of open clearing agency access, protection of the integrity of cleared swap markets and the elimination of anti-competitive barriers to customers ability to access best execution.