Non-U.S. CCP Rule Proposals (RIN 3038-AE87 and RIN 3038-AE65)
Summary
SIFMA provided comments to the Commodity Futures Trading Commission (CFTC) on proposals to allow certain non-U.S. clearing organizations that do not pose substantial risk to the U.S. financial system to register with the Commission as derivatives clearing organizations (DCOs) and comply with certain provisions of the Commodity Exchange Act (CEA) through compliance with their home-country regulatory regimes; and, permit (1) a non-U.S. clearing organization that is exempt from DCO registration to clear swaps for U.S. customers under certain circumstances and (2) a person located outside the United States that is a member of a non-U.S. clearing organization to accept funds from U.S. persons to margin swaps it clears directly at an exempt DCO, without registering as a futures commission merchant (FCM).
Excerpt
November 18, 2019
Christopher Kirkpatrick, Secretary
Commodity Futures Trading Commission
Three Lafayette Center
1155 21st Street N.W.
Washington, D.C. 20581
Re: Registration With Alternative Compliance for Non-U.S. Derivatives Clearing Organizations (RIN 3038-AE87); Exemption from Derivatives Clearing Organization Registration (RIN 3038-AE65)
Dear Mr. Kirkpatrick:
The Securities Industry and Financial Markets Association (“SIFMA”)1 welcomes the opportunity to provide the Commodity Futures Trading Commission (the “Commission”) with comments on the above proposals to (a) allow certain non-U.S. clearing organizations that do not pose substantial risk to the U.S. financial system to register with the Commission as derivatives clearing organizations (“DCOs”) and comply with certain provisions of the Commodity Exchange Act (“CEA”) through compliance with their home-country regulatory regimes (such proposal, the “Alternative Compliance Proposal”)2 and (b) permit (i) a non-U.S. clearing organization that is exempt from DCO registration to clear swaps for U.S. customers under certain circumstances and (ii) a person located outside the United States that is a member of a non-U.S. clearing organization (“non-U.S. clearing member”) to accept funds from U.S. persons to margin swaps it clears directly at an exempt DCO, without registering as a futures commission merchant (“FCM”) (such proposal, the “Exemption Proposal”3 and, together with the Alternative Compliance Proposal, the “Proposals”).
1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate on legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.
2 84 Fed. Reg. 34819 (proposed July 19, 2019) (to be codified at 17 C.F.R. §§ 39 and 140).
3 84 Fed. Reg. 35456 (proposed July 23, 2019) (to be codified at 17 C.F.R. §§ 3, 39 and 140).