MFA Comment Letter: Risk Management Requirements for DCOs

Comment Letter

RIN 3038-AC98

March 21, 2011

MFA submitted a comment letter to the CFTC on its proposed rules on "Risk Management Requirements for Derivatives Clearing Organizations," With respect to the proposed Core Principle C rules, MFA supported the CFTC's mandate that DCO participation requirements be objective, risk-based, publicly disclosed and permit fair and open access. MFA requested that the CFTC require DCOs to provide highly standardized mechanisms for establishing connectivity with SEFs and any other permitted trading venues and mandate that the DCO keep the clearing acceptance process anonymous. With respect to the proposed Core Principle D rules, MFA urged the CFTC to retain flexibility with regard to the specific margin criteria. It also recommend that the CFTC's final rules mirror margin practices in other cleared markets where each DCO sets initial margin requirements for all cleared transactions and each clearing member determines additional margin necessary for individual customers.

Cross References

Dodd-Frank Act, Title VII, Sec. 725, Title VIII, Secs. 802, 805, and 807; CEA Sec. 5b(c)(2)(C); 17 CFR 39