Buy-Side Trade Associations Submit Joint Letter to SEC on CDS Customer Portfolio Margining

The Managed Funds Association ("MFA") and the Alternative Investment Management Association ("AIMA") submitted a letter to John Ramsay, Acting Director of the SEC's Division of Trading and Markets, to express buy-side concerns with the SEC's requirements for approving individual broker-dealer/futures commission merchant margin methodologies for the CDS customer portfolio margin program. In the letter, the MFA and AIMA request that the SEC make permanent its six-month uniform customer margin level. The letter asserts that the current uncertainty as to the eventual future minimum margin level, and the possibility that such minimum margin level may differ between firms, serves to discourage buy-side firms from entering into long-term CDS contracts as they do not know what the margin requirements will prove to be.

See: MFA AIMFA Letter; MFA Press Release.See also: MFA: Update on SEC Interim Relief for CDS Customer Portfolio Margining (June 3, 2013) MFA: Update on SEC Interim Relief for CDS Customer Portfolio Margining (May 13, 2013).