MFA Submits Comments to SEC Supporting ICE Clear Credit’s Portfolio Margining Petition

June 13, 2012

From: MFA, Stuart Kaswell


Elizabeth Murphy, SEC
Mary Schapiro, Elisse Walter, Luis Aguilar, Troy Paredes, Daniel Gallagher, Robert Cook, Peter Curley, SEC
Gary Gensler, Jill Sommers, Bart Chilton, Scott O'Malia, Mark Wetjen, CFTC

MFA submitted a comment letter to the SEC in support of ICE Clear Credit LLC’s portfolio margining petition.  In the letter, MFA urged the SEC to grant the petition as soon as possible because of the significant benefits to customers in the form of capital efficiencies and clearing access that result from portfolio margining and netting of offsetting positions in single-name credit default swaps (“Security-Based CDS”) and broad-based indices (“Index CDS”).  MFA also supported ICE Clear Credit’s petition request to hold customer positions in Security-Based CDS and Index CDS, and related margin assets, in single customer omnibus accounts subject to Section 4d(f) of the Commodity Exchange Act to implement its portfolio margining program.  MFA strongly believes that customers should be able to avail themselves of the ICE Clear Credit portfolio margining offering under the Section 4d(f) account structure.  MFA pointed out that the SEC’s approval of the petition need not at this time require an alternative account offering under a Section 3E account structure.  MFA believes further delay in approving the petition will subject customers to an unjustified protracted period of competitive disadvantage to dealers who are now benefiting from ICE Clear Credit’s portfolio margining program for their house accounts/proprietary positions.