Comment Letter to Federal Reserve Bank of New York Outlining the Collaborative Work of Dealers and Buy-Side Institutions to Deliver Structural Improvements to the Global OTC Derivatives Market

March 01, 2010

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Topics: 2009 ISDA Credit Derivatives Determinations Committees Allocation Industry Working Group, asset class, Auction Settlement and Restructuring CDS Protocol, bilateral collateralization arrangements, bilateral derivatives transactions, buy-side firms, buy-side institution, caps, cash flow matching, CCP, CDS, CDS clearing, central clearing, central counterparties, central settlement, clearing house, collateralized portfolios, commodities, Confirmable LIfecycle Events, confirmation backlog reduction, credit default swap, credit derivatives, cross-currency swaps, DC, DC External Review procedure for the Cemex S.A.B de C.V. Restructuring Credit Event, default management, Depository Trust & Clearing Corporation, Dispute Resolution Procedure, dispute resolution procedures, DRP, DTCC, electronic allocation delivery functionality, electronic confirmation targest, Electronically Eligible Products, electronification, eligible trades, EMEA EM Options Annex, Equity Derivatives Markets, Europe, European Interdealer Fair Value Swap Annex, European Interdealer Index Swap Annex, European swaptions, Feasibility Study for Extending Collateralized Portfolio Reconciliations, floors, foreign exchange, forward rate agreements, G-14, G-20, global data repositories, global Interest Rate Reporting Repository, Implemenation Plan for Wider Market Roll-out, inflation swaps, initial margin, inter-dealer service, interest rate derivatives, International Swaps and Derivatives Association, Interoperability, IRRR, ISDA Credit Derivatives Determinations Committees, ISDA Governance framework, legal standardization, margin calls, Market Review of Collateralization, Master Confirmation Agreement, matching, MCA, mitigating operational risk, Modified Regstructuring Credit Event, netting, novation consent process, OIS, operational efficiency, OTC bilateral collateral processes, OTC derivatives, over-the-counter derivatives, Overnight Index Swaps, portability, processing standardization, product standardization, Raodmap for Collateral Management, rates allocation commitment, risk management, Roadmap for Collateral Management, segregation, settlement automation, single currency basis swaps, single name clearing, Small Bang, submission timeliness, Thomson Restructuring, trade date matching, transparency, Warehouse Trust, zero coupon swaps,
From: MFA, AllianceBernstein, Bank of America-Merrill Lynch, Barclays Capital, BlackRock, Inc., BlueMountain Capital Management LLC, BNP Paribas, Citadel Investment Group, L.L.C., Citi, Credit Suisse, Deutsche Bank AG, D.E. Shaw & Co., L.P., DW Investment Management LP, Goldman Sachs & Co., Goldman Sachs Asset Management, L.P., HSBC Group, International Swaps and Derivatives Association, Inc., J.P.Morgan, Morgan Stanley, Pacific Investment Management Company, LLC, The Royal Bank of Scotland Group, Asset Management Group of the Securities Industry and Financial Markets Association, Societe Generale, UBS AG, Wachovia Bank, N.A., Wellington Management Company, LLP


William Dudley, Federal Reserve Bank of New York
Federal Reserve System, Connecticut State Banking Department, Federal Deposit Insurance Corporation, Federal Reserve Bank of New York, Fedeal Reserve Bank of Richmond, French Secretariat General de la Commission Bancaire, German Federal Financial Supervisory Authority, Japan Financial Services Agency, New York State Banking Department, Office of the Comptroller of the Currency, Securities and Exchange Commission, Swiss Financial Market Supervisory Authority, United Kingdom Financial Services Authority, Commodity Futures Trading Commission, European Commission, European Central Bank

MFA, several buy-side firms, the major swap dealers and other industry trade associations jointly submitted a letter to global regulators, setting out new commitments and targets across asset classes with respect to central clearing, transparency, standardization, operational efficiency and collateral management. There were two central themes in the letter: (i) increased transparency by the creation and usage of trade repositories; and (ii) expanded usage of central clearing (including the identification of impediments of buy-side clearing and steps to eliminate those impediments).