Mr. Christopher Kirkpatrick Secretary
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, N.W.
Washington, D.C. 20581

Re: Swap Execution Facilities and Trade Execution Requirement; Proposed Rule – RIN 3038-AE25, 83 Fed. Reg. 61946 (Nov. 30, 2018)

Dear Mr. Kirkpatrick:

The Securities Industry and Financial Markets Association (“SIFMA”)1 welcomes the opportunity to provide the Commodity Futures Trading Commission (the “Commission”) with comments on the above proposal (the “Proposal”) to amend the Commission’s regulations governing swap execution facilities (“SEFs”) and the trade execution requirement added to the Commodity Exchange Act (the “CEA”) by the DoddFrank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).

We support the Commission’s decision to consider changes to these regulations with a view to promoting trading on SEFs and pre-trade price transparency. We also support the Commission’s efforts to review, clarify, and, where appropriate, codify the numerous staff guidance and no-action letters associated with these regulations.

We are concerned, however, that the Proposal does not account sufficiently for differences between the inter-dealer (“D2D”) and dealer-to-client (“D2C”) markets. Certain aspects of the Proposal, which are intended to fix issues in the D2D market, would impede liquidity formation and competition in the D2C market. More targeted measures could help achieve the Commission’s goals without resulting in these unintended negative consequences.

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