Swap Dealers and Major Swap Participants Regulation - Comment Letter - Managed Funds Association - January 18, 2011

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Duties for Swap Dealers and Major Swap Participants
Required Compliance Policies; Designation of Chief Compliance Officer
Implementation of Conflicts of Interest Policies and Procedures by Swap Dealers and Major Swap Participants
January 18, 2011

From the Comment Letter:

"MFA urges the Commission to adopt rules and guidance that effectively clarify the rights and obligations of market participants. We believe that greater guidance will clarify the lines between permissible and impermissible conduct and allow market participants to develop proper internal controls. To that end, we recommend that:

  • With respect to the Proposed Duties Rules, the Commission clarify that the rule does not impose any new (a) fiduciary obligations or duties (i.e., duties beyond those to which participants in the futures and derivatives markets would otherwise be subject to by agreement or by operation of common law) or (b) supervisory duties on market participants;
  • With respect to the Proposed Conflicts Rules, the Commission establish a clear separation between the research and trading departments, so that the criteria for clearing membership are objective and risk-based; and
  • With respect to the CCO Proposed Rules, the Commission clarify that the chief executive officer (“CEO”) or the firm itself must certify and submit the annual report, not the chief compliance officer (“CCO”) individually.

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