Futures Commission Merchant Regulation - Comment Letter - Coalition of Energy End Users - January 18, 2011

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Protection of Cleared Swaps Customers Before and After Commodity Broker Bankruptcies
January 18, 2011

From the comment letter:

“The coalition of energy end-users believes that it is essential that the transaction costs and the amount of working capital associated with FCM and DCO collateral management be kept at a reasonable level. The current omnibus model has achieved this goal while protecting against both individual and systemic risks. While the coalition is generally supportive of providing additional choice in the market, including the provision of an individual account option, the coalition is concerned about the cost impacts the individual account model might have, even if implemented only as an option… Finally, the potential for cost increases associated with implementation of the various segregation models highlights the importance of the CFTC adhering to congressional intent in properly exempting end-users from the mandatory clearing requirement, thus allowing end users to retain the flexibility to manage their individual risks as best suits their businesses.”


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