SIFMA AMG Submits Comments to the CFTC on SEF Trading Requirements (with Lofchie Comment)

The Asset Management Group of SIFMA (SIFMA AMG) submitted the attached comment letter to the CFTC in which it expressed significant concerns regarding straight-through processing, swap execution facility (SEF) implementation and relief relating to the aggregation provision in the final block trade rule. In addition, SIFMA AMG requested an extension of certain no-action letters issued by CFTC staff relating to the implementation of the CFTC SEF final rules until at least February 1, 2014.

SIFMA further requested further no-action relief (through March 31, 2014) relating to the aggregation prohibition in the final trade block rule.

Lofchie Comment: What we are likely to find as the CFTC eventually attempts to bring enforcement actions based on its "rules" that were never properly adopted is that these "rules" issued in the form of "guidance" are subject to challenge as improperly imposed. In the case of its various no-action letters and guidance on SEFs (many of which impose additional conditions on market participants), the argument that the CFTC is not complying with the obligations incumbent upon it as a regulatory agency seem at least as strong. Certainly, any market participant charged with a violation by the CFTC on the basis of its guidance and no-action letters should consider whether the CFTC's charge has a proper foundation.

See: SIFMA AMG comment letter.Related News: "CFTC Issues Staff Guidance on Swaps Straight-Through Processing (with Delta Strategy Group Summary)" (September 27, 2013). See also: CFTC Staff Guidance on Swaps Straight-Through Processing. &