Capital, Margin & Segregation Requirements

SIFMA provides comments to the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) regarding comments, prior to the proposed rulemaking, on capital requirements and customer protection issues raised by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The Capital Steering Committee of SIFMA includes many financial institutions who conduct securities and futures businesses through entities registered with both the CFTC and SEC. Further, many of the financial institutions represented on the Committee offer clients over-the-counter (OTC) derivative products through broker-dealers (BDs), futures commission merchants (FCMs) and affiliates of BDs and FCMs subject to the supervision or oversight of other regulatory bodies. The current expectation among our members is that these financial institutions will register with the Commissions as “swap dealers” and “security-based swap dealers” (collectively, Swap Dealers) for their dealing activities in swaps and security-based swaps (collectively, Swaps), respectively.

Questions and concerns regarding capital requirements and customer protection discussed include:

• implementation and transition;
• structural issues;
• capital requirements;
• segregation/customer protection requirements;
• margin requirements; and
• treatment of existing transactions.