On December 7, 2020, MFA and the Asset Management Group of SIFMA jointly submitted a letter in support of the SEC extending and making permanent relief that it provided in 2012 in connection with portfolio margining of cleared security-based swaps (“CDS”) and swaps that are credit-default swaps (“2020 proposed order”). The Associations believe the 2012 SEC exemptive relief promotes clearing and more efficient and effective risk management in the US credit derivatives market by: (1) facilitating systemic risk reduction; (2) providing capital efficiencies; (3) improving buy-side access to clearing and removing economic barriers to customer clearing; (4) promoting competitive equality; and (5) improving the efficiency and effectiveness of risk management. The Associations recommended limited modifications and urged the SEC to make the 2020 proposed order permanent to facilitate portfolio margining of cleared CDS.
