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SIFMA AMG on Proposed Process to Make Swaps Available to Trade

Issue

OTC Derivatives→

Summary

The Asset Management Group (AMG) of SIFMA provides comments to the Commodity Futures Trading Commission (CFTC) on the proposed process for determining that a swap is “made available to trade” (MAT) on a swap execution facility (SEF) or designated contract market (DCM), RIN 3038–AD18.  As stated in the group’s March 8, 2011 letter on the CFTC’s proposed SEF rules, SIFMA AMG believes that the MAT determination ideally should be made by the CFTC, rather than by SEFs, to avoid conflicts of interest that might otherwise arise.  SIFMA AMG continues to believe that it would be more appropriate for the MAT determination to be made by the CFTC than by SEFs, DCMs or other market participants.  While the proposal increases CFTC involvement by subjecting MAT determinations to CFTC review, SIFMA AMG believes it would be more appropriate for the determination to be made by the CFTC, with input from market participants through an open comment period and the formal recommendation process.

PDF

Submitted To

CFTC

Submitted By

SIFMA AMG

Related Committee(s)

  • Asset Management

Date

13

February

2012

Excerpt

Mr. David A. Stawick
Secretary
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581

Re: Process for a Designated Contract Market or Swap Execution Facility To Make a Swap Available To Trade – RIN 3038–AD18

Dear Mr. Stawick:

The Asset Management Group (the “AMG”)1 of the Securities Industry and Financial Markets Association (“SIFMA”) appreciates the opportunity to provide the Commodity Futures Trading Commission (the “Commission”) with comments regarding their proposed process for determining that a swap is “made available to trade” (“MAT”) on a swap execution facility (“SEF”) or designated contract market (“DCM”).2

As stated in our March 8, 2011 letter on the Commission’s proposed SEF rules, we believe that the MAT determination ideally should be made by the Commission, rather than by SEFs, to avoid conflicts of interest that might otherwise arise.3

We thank the Commission for taking this comment into account, along with similar comments by other market participants, in deciding to repropose the process for a MAT determination to include Commission involvement.4 However, we continue to believe that it would be more appropriate for the MAT determination to be made by the Commission than by SEFs, DCMs
or other market participants. While the Proposal increases Commission involvement by subjecting MAT determinations to Commission review, we believe it would be more appropriate for the determination to be made by the Commission, with input from market participants through an open comment period and the formal recommendation process suggested below.

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