Swap Entities Regulation - Comment Letter - CME Group - April 11, 2011

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Dodd-Frank Timeline, Requirements for Processing, Clearing, and Transfer of Customer Positions
Proposal Date Final Rule Issue Effective Date
December 13, 2010 October 18, 2011 January 9, 2012

Requirements for Processing, Clearing, and Transfer of Customer Positions
April 11, 2011 From the comment letter:

  • ..."in order to ensure consistency between NFA Rule 2-27 and any DCO rules regarding the transfer of customer accounts, we suggest that the CFTC revise proposed Regulation 39.15(d) to require each DCO to “have rules providing that, upon the request of a carrying clearing member and subject to the consent of the receiving clearing member, the [DCO] will promptly transfer all or a portion of a customer's portfolio of positions and related funds from the carrying clearing member of the [DCO] to another clearing member of the [DCO], without requiring the close-out and re-booking of the positions prior to the requested transfer."
  • CME Group is very concerned with the timing elements in the proposed Regulation...which disregard key aspects of trade execution and submission and essential elements of DCO risk management. It would be imprudent, impractical and risk-additive to require a DCO to accept transactions for clearing “immediately upon execution” or “upon submission”.
  • CME Group believes that the proposed time frames for submission of swaps are appropriate and operationally feasible, and we are aware of no systemic obstacles to the coordination between DCOs, MSPs and SDs required under the proposed regulation.


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