Margin Requirements for Non-Centrally Cleared Swaps & Security-Based Swaps

Summary

SIFMA provides comments to the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), the Board of Governors of the Federals Reserve (Fed), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), the Federal Housing Finance Agency (FHFA), and the Farm Credit Administration (FCA) on margin requirements for non-centrally cleared swaps and security-based swaps (SBS).

SIFMA understands that the Agencies are considering modifications to the U.S. Margin Proposals in order to harmonize U.S. margin requirements for non-centrally cleared swaps and security-based swaps with the final policy framework agreed by the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) for margin requirements for non-centrally cleared derivatives (the BCBS-IOSCO Framework).

SIFMA summarizes and discusses, for the consideration of the Agencies in their respective U.S. Margin re-Proposals, certain key issues that are either raised by national implementation of the BCBS-IOSCO Framework or unresolved by the BCBS-IOSCO Framework. SIFMA believes that effective and consistent resolution of these issues across U.S. and international regulators is necessary to achieve the objectives of the BCBS-IOSCO Framework.

Excerpt

Melissa Jurgens, Secretary

Commodity Futures Trading Commission

1155 21st Street, N.W.

Washington, DC 20581

Elizabeth M. Murphy, Secretary

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Jennifer J. Johnson, Secretary

Board of Governors of the Federal Reserve System

20th Street and Constitution Avenue, N.W.

Washington, DC 20551

Office of the Comptroller of the

Currency

250 E Street, S.W.

Mail Stop 2-3

Washington, DC 20219

Robert E. Feldman, Executive Secretary

Attention: Comments

Federal Deposit Insurance Corporation

550 17th Street, N.W.

Washington, DC 20429

Alfred M. Pollard, General Counsel

Attention: Comments/RIN 2590-AA45

Federal Housing Finance Agency

Fourth Floor, 1700 G Street, N.W.

Washington, DC 20552

Gary K. Van Meter, Director

Office of Regulatory Policy

Farm Credit Administration

1501 Farm Credit Drive

McLean, VA 22102

Re: Margin Requirements for Non-Centrally Cleared Swaps and SecurityBased Swaps

Ladies and Gentlemen:

The Securities Industry and Financial Markets Association (“SIFMA”) is writing with respect to the proposed margin requirements for non-centrally cleared swaps and security- based swaps (the “U.S. Margin Proposals”) published by the Prudential Regulators, the Commodity Futures Trading Commission (the “CFTC”) and the Securities and Exchange Commission (the “SEC,” and, together with the CFTC and the Prudential Regulators, the “Agencies”) pursuant to Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).2

We understand that the Agencies are considering modifications to the U.S. Margin Proposals in order to harmonize U.S. margin requirements for non-centrally cleared swaps and security-based swaps with the final policy framework agreed by the Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”) for margin requirements for non-centrally cleared derivatives (the “BCBS-IOSCO Framework”).3

In this letter, we summarize and discuss, for the consideration of the Agencies in their respective U.S. Margin re-Proposals, certain key issues that are either raised by national  implementation of the BCBS-IOSCO Framework or unresolved by the BCBS-IOSCO Framework. SIFMA believes that effective and consistent resolution of these issues across U.S.

and international regulators is necessary to achieve the objectives of the BCBS-IOSCO Framework.4  This letter is intended to complement the letter submitted to the Agencies by the

International Swaps and Derivatives Association (“ISDA”) on February 5, 2014.

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