Swap Dealers and Major Swap Participants Regulation - Comment Letter - FIA, ISDA, SIFMA - August 26, 2011

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Dodd-Frank Timeline, Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants, SEC
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Business Conduct Standards for Security-Based Swap Dealers and Major Security-Based Swap Participants
August 26, 2011

From the comment letter:

"It is critical that swap and security-based swap (SBS) market participants, who by and large are sophisticated institutional investors, large corporate end users and financial intermediaries, retain the ability to establish, without ambiguity, the nature of their relationship. While it is clear that Congress did not intend for the SBS market to operate as a 'caveat emptor' marketplace, it is equally clear that Congress specifically intended to distinguish advisory relationships from the more common principal-to-principal relationships that characterize the swap and SBS markets. We believe that the Proposed Rules balance these objectives effectively, although... certain clarifications are necessary, including clarifications needed to enable parties to negotiate and execute SBS transactions in a timely fashion without subjecting end users to undue (and unwanted) market risk during changing market conditions."

The three organizations also call for further definition of the terms "advisor to a special entity," "associate persons" (independent representatives of a special entity), and "special entity."

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