Swap Entities Regulation - Comment Letter - CME Group - April 29, 2011

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Dodd-Frank Timeline, Clearing Agency Standards for Operation and Governance, SEC
Proposal Date Final Rule Issue Effective Date Reopened Comment Period Deadline
March 16, 2011 November 2, 2012 January 2, 2013 July 22, 2013

Clearing Agency Standards for Operation and Governance
April 29, 2011

CME Group begins its comment letter by addressing "The Proposed Rules and Related CFTC Rulemakings," specifically that risk management should be treated on a case-by-case basis and cannot be standardized, that the proposed rules constrain clearing member participation and eligibility to a certain extent, that the proposed rules concerning clearing agencies should be principles-based and not overly prescriptive, and that compliance regulation in the proposed rules should more closely correlate with the overall goals of Dodd-Frank.

Further:

  • "CME Group believes that final Commission rules that are applicable to clearinghouses processing single name credit default swap (CDS) should be comparable to the final requirements applicable to clearinghouses clearing index-based CDS to the maximum extent possible."
  • "CME Group believes the 'deemed registered' provision in Dodd-Frank was intended to facilitate increased CCP clearing of CDS by removing the need for derivatives clearing organizations (DCOs) clearing CDS from having to receive periodic extensions or from having to register initially. It was not intended to reshape the basic division of agency oversight with respect to organizations like CME Group that are primarily futures markets and that also offer clearing for over-the-counter security-based swaps products (that is, single name CDS)."



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