MFA Comment Letter to CFTC on Proposed Rulemaking to Create a Separate Account Class for Customer Positions in Cleared OTC Derivatives

MFA submitted a letter to the CFTC in response to its notice of proposed rulemaking, which was published on August 13, 2009, to create a separate account class for customer positions in cleared OTC derivatives. In our letter, MFA provides its support for the proposal because, in MFA’s view, the proposal: (i) would significantly mitigate counterparty risk and systemic risk; (ii) is necessary to ensure broad market support of customer clearing initiatives in light of alleged uncertainty; and (iii) is consistent with current policy objectives and some legislative proposals that include measures to protect customer positions and collateral in the context of central clearing.