Swap Entities Regulation - Provisions Common to Registered Entities - Comment Letters

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Gavel.png FINAL RULE: This page refers to the proposed rulemaking on the provisions common to registered entities. The CFTC final rule was issued at its July 19 open meeting.
Dodd-Frank Timeline-Provisions Common to Registered Entities
Proposal Date Final Rule Issue Effective/Compliance Date
November 2, 2010 July 27, 2011 September 26, 2011

Futures Industry Association - December 23, 2010[edit]

Provisions Common to Registered Entities
December 23, 2010

The Futures Industry Association (FIA) believes that "the Commission should use this opportunity to increase the transparency of the rulemaking processes of the registered entities by taking the following, relatively simple steps to ensure the widespread and timely availability of information to the members and users of the registered entities."

Specifically, FIA suggests the commission take two steps:

  • Publication of a "daily consolidated notice of all rule and product filings by the registered entities and all actions taken by the Commission in response thereto (such as approvals and stays of self-certifications), similar to the daily News Digest that is published daily on the Web site of the Securities and Exchange Commission (SEC)," and
  • Requirement that "the registered entities to include, in the forepart of each rule submission, a concise explanation (15-35 words would likely be sufficient) of the operation, purpose and effect of the proposed rule or rule amendment and that the Commission publish that explanation in the daily digest, together with a hyperlink to the full text of the rule submission on the commission’s web site."
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Intercontinental Exchange - December 31, 2010[edit]

Provisions Common to Registered Entities
December 31, 2010

In the comment letter the Intercontinental Exchange (ICE) agrees with the commission's amendments to Part 40, except for these two:

  • a certification that the Submission complies with the Act and commission regulations and the documentation relied on to support that view; and
  • a statement verifying that a due diligence review of the legal conditions, including intellectual property rights, was conducted.

ICE believes that the commission oversteps the Dodd-Frank mandate with these provisions, which will create an "unnecessary burden" on registered entities.

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Options Clearing Corporation - January 3, 2011[edit]

Provisions Common to Registered Entities
January 3, 2011

The Options Clearing Corporation (OCC0 agrees with the proposal, except for a few "relatively minor, yet in some cases quite important, modifications and clarifications," including:

  • The registered entity submission process goes beyond the Dodd-Frank mandate by adding requirements related to documentation and legal due diligence.
  • The language of the "terms and conditions" definition appears to stifle innovation by suggesting that terms and conditions "conform to industry standards adopted by comparable contracts."
  • The imposition of a "fixed and inflexible" time frame (two days) on requests for additional information regarding new product approval.
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CME Group - January 3, 2011[edit]

Provisions Common to Registered Entities
January 3, 2011

Summary of points from the comment letter:

  • The new product and rule submission procedures would significantly increase costs to registered entities.
  • The proposed "Stay" provision should not be applied in all circumstances.
  • The scope of the proposed approval procedures for Systemically Important Derivatives Clearing Organizations (SIDCOs) is overbroad.
  • The prohibition on event contracts should be further defined.
  • De-listing of products should be made effective upon submission.
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LCH.Clearnet - December 31, 2010[edit]

Provisions Common to Registered Entities
December 31, 2010

LCH.Clearnet suggests adding language to the proposal "to exempt such overseas DCOs from the requirement to file rules with the Commission regarding products to be cleared if either:

  1. the product is listed for trading on a foreign board of trade; or
  2. the product is not required to be cleared by a DCO registered with the Commission."
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