MFA Submits Comments to SEC Supporting ICE Clear Credit’s Portfolio Margining Petition

On June 13, the MFA submitted a comment letter to the SEC in support of ICE Clear Credit LLC's portfolio margining petition. In the letter, the MFA urged the SEC to grant the petition as soon as possible because of the significant benefits to customers in the form of capital efficiencies and clearing access that result from portfolio margining and netting of offsetting positions in single-name credit default swaps ("Security-Based CDS") and broad-based indices ("Index CDS"). The MFA also supported ICE Clear Credit's petition request to hold customer positions in Security-Based CDS and Index CDS, and related margin assets, in single customer omnibus accounts subject to Section 4d(f) of the Commodity Exchange Act to implement its portfolio margining program. The MFA strongly believes that customers should be able to avail themselves of the ICE Clear Credit portfolio margining offering under the Section 4d(f) account structure. The MFA pointed out that the SEC's approval of the petition need not at this time require an alternative account offering under a Section 3E account structure. The MFA believes further delay in approving the petition will subject customers to an unjustified protracted period of competitive disadvantage to dealers who are now benefiting from ICE Clear Credit's portfolio margining program for their house accounts/proprietary positions.

View comments in full here(links externally to MFA website).

For more information about this document, you may contact one of the following Cadwalader attorneys: Scott Cammarn.