Derivatives Clearing Organizations Regulation - Comment Letter - National Energy Marketers Association - February 22, 2011

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Risk Management Requirements for Derivatives Clearing Organizations
February 22, 2011

From the letter:

"The main concern of NEM about the mandatory clearing requirement is the cash requirements in a capital intensive industry. Some of the proposed rules in Risk Management Requirements for Derivatives Clearing Organizations actually make this cash intensity situation worse."

Areas of concern to NEM in these proposed rules include:

  • the elimination of letters of credit as an acceptable source of collateral for margin;
  • the requirement that initial margins for OTC trades be set to cover 5 days rather than 2 days; and
  • the requirement for daily settlements of funds.


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