MFA Seeks Relief from External Business Conduct Rules for Prime Brokerage

The MFA submitted a letter to the CFTC requesting relief from the CFTC's final rules on "Business Conduct Standards for Swap Dealers and Major Swap Participants with Counterparties" (External Business Conduct Rules) prior to the compliance date in order to allow intermediated trading to continue in its current form and to prevent disruptions to market liquidity. Specifically, MFA requested relief for all intermediated trading relationships related to any class of products where the swap dealer is acting in its capacity as a prime broker or intermediary and where both the prime broker and executing dealer are swap dealers.

    The MFA letter asserts that the CFTC Rules "do not account for intermediated trading relationships, and thus, do not provide for or allow proper allocation of [business conduct] responsibilities" between a prime broker and executing broker.

      View letter in full here (links externally to MFA website).See also: Press Release.

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