Extension: Municipal Securities Disclosure (Exchange Act Rule 15c2–12)
SIFMA provided comments on the request for comment issued by the U.S. Securities and Exchange Commission (SEC) on the existing…
Excerpt
March 18, 2019
Office of the Comptroller of the Currency
400 7th Street, SW, Suite 3E-218
Washington, DC 20219
Attention: Legislative and Regulatory Activities Division
Docket ID OCC-2018-0030; RIN 1557-AE44
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, NW
Washington, DC 20551
Attention: Ann E. Misback, Secretary
Docket No. R-1629; RIN 7100-AF22
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Attention: Robert E. Feldman, Executive Secretary
RIN 3064-AE80
Re: SIFMA AMG and MFA Comment on Proposed Standardized Approach for Calculating the Exposure Amount of Derivative Contracts
Dear Sirs and Madams:
The Securities Industry and Financial Markets Association’s Asset Management Group (“SIFMA AMG”) and Managed Funds Association (“MFA”)1 appreciate the opportunity to comment on the proposed rule (the “Proposal”) issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (the “Agencies”) to implement the standardized approach for counterparty credit risk (“SA-CCR”) as a replacement for the current exposure method (“CEM”) in the U.S. capital rules.2 SIFMA AMG members, on behalf of their clients, and MFA members use futures and cleared swaps, as well as other derivatives, for a range of purposes, including as a means to manage or hedge investment risks such as changes in interest rates, exchange rates, and commodity prices.
Post-crisis capital requirements that have raised capital requirements for banking organizations offering derivatives to clients, such as the supplementary leverage ratio (“SLR”), have reduced market liquidity, imposed barriers to access derivatives, and increased systemic risk. For example, with respect to central clearing, data provided in this letter shows that SIFMA AMG member clients have experienced reduced access to derivatives clearing services and higher clearing fees following the implementation of post-crisis capital requirements; additionally, in times of stress, such capital requirements may significantly.
1 See Annex B for descriptions of SIFMA AMG and MFA.
2 83 Fed. Reg. 64,660 (Dec. 17, 2018).