Comment Letter to CFTC Proposed Rule Regarding Protection of Cleared Swaps Customers Before and After Commodity Broker Bankruptcies

Futures Industry Association

FIA filed a comment letter with the CFTC on Jan 18 in response to the CFTC's advance notice of proposed rulemaking regarding the protection of customer collateral posted with futures commission merchants in connection with the clearing of swap transactions. The CFTC's notice asked for comment on several models for dealing with "fellow customer risk", including the full segregation of each customer's collateral in separate accounts.

FIA noted that the "baseline" model, i.e., the existing model used in the clearing of exchange-traded futures and options, has proven to be successful in protecting customers and cautioned that each one of the alternative models would pose "serious policy and operational concerns."

Document Number

RIN 3038-AD99

Date

January 18, 2011

Cross References (links may require a Cabinet subscription)

Dodd-Frank Act, Title VII, Sec. 724

new CEA Sec. 4d(f)