MFA Letter to CFTC on Concept Release on Whether to Eliminate the Bona Fide Hedge Exemption for Certain Swap Dealers and Create a New Limited Risk Management Exemption from Speculative Position Limits

MFA submitted a letter to the CFTC today in response to its concept release on the bona fide hedge exemption for certain swap dealers. We recommend that the Commission consider the bona fide hedge exemption in the context of the broader OTC derivatives regulatory reform goals and objectives; seek more market data to understand the role and market impact of these bona fide hedge exemptions before it makes a determination on their elimination and/or replacement; propose rulemaking to require swap dealers and index traders to report OTC swap market transactions to the Commission on a permanent, ongoing basis; and provide the public with greater transparency with respect to OTC swap markets relating to commodity futures markets through aggregated reports.