On September 18, MFA and the Alternative Investment Management Association (AIMA) submitted a joint follow-up letter to Mr. John Ramsay, Acting Director of the SEC’s Division of Trading and Markets (Division), to explain buy-side concerns with the Division’s requirements for approving individual broker-dealer/futures commission merchant (BD/FCM) margin methodologies for the cleared credit default swap (CDS) customer portfolio margin program. The letter requests that the Division make permanent its six-month uniform customer margin level as formulated in its June 7, 2013 letters to eight registered BD/FCMs. Not only would the permanent adoption of this approach be more efficient for the SEC and FINRA staffs to administer, it would also facilitate the Dodd-Frank Act’s clearing reforms by removing the unintended impediments to single-name CDS clearing and customer access to the CDS portfolio margin program.
September 18, 2013
Topics: AIMA Alternative Investment Management Association, John Ramsay, SEC, Securities and Exchange Commission, Division of Trading and Markets, broker-dealer, margin, customer portfolios, CDS, credit default swap, portfolio margining, swaps, security-based swaps, clearing, ICE Clear Credit LLC, registration, futures commission merchant, FCM, Dodd-Frank Act, single-name CDS, buy-side, counterparties, portfolio, CDS index, Commodity Futures Trading Commission, CFTC, Mary Jo White, Gary Gensler, voluntary customer clearing, FINRA, Financial Industry Regulatory Authority, risk management, initial margin, transparency, Basel Committee on Banking Supervision, International Organization of Securities Commissions, IOSCO, proprietary information, margin methodologies, tentative net capital, portfolio fragmentation, market inefficiencies,
To:
John Ramsay, SECMary Jo White, Luis Aguilar, Daniel Gallagher, Michael Piwowar, Kara Stein, SEC
Michael Macchiaroli, Thomas McGowan, Randall Roy, SEC; Mary John Miller, Under Secretary for Domestic Finance, United States Department of the Treasury