Trade Associations Submit Comments to the CFTC on LSOC Implementation and Clearing Mandate (with Lofchie Comment)

SIFMA AMG, the Investment Company Institute ("ICI") and the Investment Adviser Association ("IAA") submitted the attached comments to the CFTC expressing concern with respect to the incomplete implementation of the protections provided to customer excess margin held by FCMs and DCOs under the "legal segregation with operational commingling" ("LSOC") model adopted by the CFTC.

The groups have requested that the CFTC Division of Clearing and Risk delay the deadline for mandatory clearing by Category 2 entities until September 9, 2013 (the deadline for Category 3 entities), to allow DCOs and FCMs the necessary time to implement the technological systems which will provide these protections.

Lofchie Comment: Many swaps customers were better able to protect themselves under the prior swaps regime where they could enter into tri-party custody agreements.

Click here to view letter in full (links externally to SIFMA website).