Derivatives Clearing Organizations Regulation - Information Management Requirements - Comment Letters

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Dodd-Frank Timeline, Reporting, Recordkeeping, Public Information and Information Sharing Requirements for DCOs
Proposal Date Final Rule Issue Effective Date
December 13, 2010 October 18, 2011 January 9, 2012

The Options Clearing Corporation - February 11, 2011[edit]

Information Management Requirements for Derivatives Clearing Organization
February 11, 2011

The OCC suggests that "it is counterintuitive to require a DCO to file a report with the Commission when there is a significant decrease in its financial resources that is a result of a decrease in the DCOs margin requirements and overall risk profile. In light of the numerous additional reporting and recordkeeping requirements imposed on DCOs as a result of the Dodd-Frank Act, OCC does not believe that a special report to the Commission is warranted in the situation described above."

Additionally, with respect to intraday initial margin calls to clearing members that are FCMs, "we believe that a two hour reporting requirement is more appropriate given the potential size of the information requested and the manual nature of the reporting process."

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Kansas City Board of Trade Clearing Corporation - February 14, 2011[edit]

Information Management Requirements for Derivatives Clearing Organization
February 14, 2011

From the comment letter:

KCC is concerned about the increasing level of detailed information proposed to be collected by the Commission in specified formats and we question the necessity of this increasing level of detail in conducting an oversight role. Further, the timeframes for compliance with specific Commission data formats are always a challenge in terms of the redeployment of technology resources. We therefore request that the Commission reconsider the amount and detail of information necessary for its oversight role, mindful of the DCOs procedures for accomplishing much of the Commission’s intended use of the information.

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Minneapolis Grain Exchange - February 14, 2011[edit]

Information Management Requirements for Derivatives Clearing Organization
February 14, 2011

Regarding the proposed rule, MGEX offers its concerns about the daily reporting requirement to the CFTC and the additional burdens it may create. Additionally, “MGEX does not believe the value of the daily reports will outweigh the burden on the DCOs to establish and maintain the daily reporting, or the burden on the CFTC if there are data storage limits. MGEX respectfully suggests requiring these reports on an as-needed basis rather than on a daily basis.” MGEX goes on to say that they “agree with the purpose in providing the Commission with advance notice of a change in ownership, corporate or organizational structure. However, MGEX believes advance notice must never be subject to public disclosure due to the potential confidential nature of the event. This should be automatic; no DCO should have to also petition for §145.9 protection at the same time.”

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CME Group - February 14, 2011[edit]

Information Management Requirements for Derivatives Clearing Organization
February 14, 2011

From the comment letter:

"While CME Group is happy to comply with the proposed reporting requirements, we urge the CFTC to work with DCOs to determine the form and manner in which information will be supplied, particularly with regard to information required to be reported on a daily basis relating to positions and margin requirements.

CME Clearing staff and the clearing member typically exchange written correspondence with respect to audit findings and the resolution thereof. In certain instances, this process results in a staff recommendation to the CHRC that sanctions be imposed against the member firm. We do not believe that any stage in this process can be equated to “initiating a rule enforcement action against a clearing member.” A better approach would be to eliminate the requirement that DCOs report the initiation of rule enforcement actions against clearing members and simply require them to report when they impose sanctions against clearing members."

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References[edit]

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