MFA and AIMA Submit Joint Letter to CFTC on Further Proposed Cross-Border Guidance

February 06, 2013

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Topics: adviser registration AIMA, Alternative Investment Management Association, buy-side market participants, CCP, central clearing, central counterparty, CFTC, clearing, collective investment vehicles, commodities, Commodity Futures Trading Commission, commodity pool, commodity pool operator, Corporation, Council of the European Union, CPO, CPPSS-IOSCO, Cross-Border, de minimis, Dealer, derivatives, direct or indirect ownership, Dodd-Frank Act, duplicative regulation, ESMA, estate, EU, European Parliament, European Securities and Markets Authority, European Union, execution, foreign regulators, Form CPO-PQR, fund of funds, G20, G20 commitments, Gary Gensler, hedge fund managers, Hong Kong, Hong Kong Monetary Authority, income tax, international harmonization of regulations, International Organization of Securities Commissions, interpretive guidance, investment fund, investment manager, IOSCO, joint-stock company, Limited Liability Company, limited liability partnership, listed entity, LLC, LLP, Look Through, Major Swap Participant, majority ownership, mandatory clearing requirements, market participants, Mary Schapiro, MAS, Monetary Authority of Singapore, msp, OCC, Office of the Comptroller of the Currency, OTC derivatives, OTC derivatives market, OTC derivatives reform, over-the-counter derivatives, ownership test, partnership, pension, phase-in period, pooled accounts, prime brokers, principal place of business test, registration, regulatory framework, SEC, Securities and Exchange Commission, Singapore, swap dealer, swaps, systemic risk, trade repositories, transparency, Trust, U.S. person,
From: MFA, Stuart Kaswell; AIMA, Jiří Krόl


David Stawick, CFTC
Gary Gensler, Bart Chilton, Jill Sommers, Scott O’Malia, Mark Wetjen, CFTC

MFA and AIMA jointly submitted a comment letter to the Commodity Futures Trading Commission (CFTC) on its “Further Proposed Guidance Regarding Compliance With Certain Swap Regulations.”  In the letter, MFA and AIMA expressed appreciation for the CFTC’s proposed modifications to the “U.S. person” definition, but also expressed continued concern with the breadth of the definition and its application to non-U.S. funds.  In particular, MFA and AIMA urged the CFTC to provide equal treatment of funds and corporate entities by modifying the proposed “U.S. person” definition to:

  • Eliminate the “look-through” to all indirect investors, and
  • Apply only the tests in alternative prong (ii) to funds, specifically, the tests related to place of organization, majority direct ownership, and unlimited liability.

MFA and AIMA also asked the CFTC to clarify that:

  1. A fund’s principal place of business is its place of organization or incorporation,
  2. A fund may rely on representations from its investors at to the investors’ U.S. person status, and
  3. If it modifies the “U.S. person” definition in the future, it will give notice, an opportunity for the public to comment and one year for affected entities to comply with the relevant regulatory requirements.

Lastly, MFA and AIMA urged further coordination between the CFTC and other U.S. and international regulators to avoid duplicative regulation and to address issues related to the practical details of how substituted compliance will work in practice.