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: G-14 buy-side institution, over-the-counter derivatives, OTC derivatives, G-20, transparency, global data repositories, asset class, central clearing, segregation, credit default swap, CDS, portability, ISDA Credit Derivatives Determinations Committees, International Swaps and Derivatives Association, central counterparties, CCP, DC, product standardization, processing standardization, legal standardization, operational efficiency, mitigating operational risk, risk management, netting, bilateral collateralization arrangements, bilateral derivatives transactions, initial margin, electronification, credit derivatives, CDS clearing, Europe, buy-side firms, OTC bilateral collateral processes, ISDA Governance framework, 2009 ISDA Credit Derivatives Determinations Committees, Auction Settlement and Restructuring CDS Protocol, Small Bang, Modified Regstructuring Credit Event, Thomson Restructuring, DC External Review procedure for the Cemex S.A.B de C.V. Restructuring Credit Event, interest rate derivatives, Overnight Index Swaps, OIS, single name clearing, dispute resolution procedures, Raodmap for Collateral Management, collateralized portfolios, margin calls, Equity Derivatives Markets, commodities, foreign exchange, global Interest Rate Reporting Repository, IRRR, eligible trades, Depository Trust & Clearing Corporation, DTCC, Warehouse Trust, zero coupon swaps, single currency basis swaps, forward rate agreements, cross-currency swaps, caps, floors, European swaptions, inflation swaps, default management, inter-dealer service, clearing house, Master Confirmation Agreement, MCA, European Interdealer Index Swap Annex, EMEA EM Options Annex, European Interdealer Fair Value Swap Annex, Roadmap for Collateral Management, Dispute Resolution Procedure, DRP, Market Review of Collateralization, Feasibility Study for Extending Collateralized Portfolio Reconciliations, Implemenation Plan for Wider Market Roll-out, central settlement, settlement automation, Interoperability, trade date matching, novation consent process, Electronically Eligible Products, Confirmable LIfecycle Events, electronic confirmation targest, submission timeliness, matching, confirmation backlog reduction, cash flow matching, rates allocation commitment, electronic allocation delivery functionality, Allocation Industry Working Group,
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).