Comment Letter to CFTC on Customer Clearing Documentation, Timing of Acceptance for Clearing, and Clearing Member Risk Management

MFA submitted a comment letter to the CFTC in response to its notices of proposed rulemaking on Customer Clearing Documentation and Timing of Acceptance for Clearing and Clearing Member Risk Management. In our letter, MFA strongly supported these proposed rules, as we believe they are essential to achieving the fundamental objectives of the Dodd-Frank Wall Street Reform and Consumer Protection Act: open access to competitive and efficient markets, promotion of greater central clearing of swaps and the reduction of systemic risk through real-time clearing. From a cost-benefit perspective, we emphasized the benefits of real-time clearing, combined with the elimination of the need for clearing members to build systems to administer execution sub-limits, to foster competitive futures commission merchant (FCM) offerings, and to reduce barriers to clearing through FCMs. We encouraged the CFTC to adopt final rules in the form proposed, with several clarifications that we recommended to ensure that these proposed rules work in tandem with the CFTCs proposed rules on Requirements for Processing, Clearing, and Transfer of Customer Positions to protect open access, fair competition and real-time processing of trades from the moment of execution through communication of clearing disposition.