Swap Dealers and Major Swap Participants Regulation - Comment Letter - Federal Home Loan Banks - January 18, 2011
Duties for Swap Dealers and Major Swap Participants
January 18, 2011
This comment letter addresses the following rules: CCO Designation, Duties of Swap Dealers and Major Swap Participants, and SD-MSP Conflicts of Interest.
The FHLBanks argue that while the internal business conduct proposed rules "constitute prudent business practices and may reduce systemic risk when applied to entities that are not currently regulated, we think that they are highly duplicative and, accordingly, unreasonable for entities that are already subject to extensive prudential regulation." More specifically, the FHLBanks state:
- Internal business conduct standards should not apply to limited swap dealers that are subject to regulation by a prudential regulator
- Internal business conduct standards should only apply to the swap dealing activities of limited swap dealers
- In no event should internal business conduct standards imposed on limited swap dealers duplicate regulations already imposed by prudential regulators for such entities