Protection of Cleared Swaps Customers Before & After Commodity Broker Bankruptcies

SIFMA provides comment to the Commodity Futures Trading Commission (CFTC) on the Protection of Cleared Swaps Customers Before and After Commodity Broker Bankruptcies (the ANPR), RIN 3038-AD99; 17 CFR Part 190.  The ANPR outlines four models for the segregation of collateral posted by customers to futures commission merchants (FCMs) in support of swaps cleared through a derivatives clearing organization (DCO).  The models are being considered by the CFTC as a way to implement Commodity Exchange Act (CEA) Section 4d(f)(2), which was added by Section 724 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).  While supporting the goals of CEA Section 4d(f)(2), the protection of customers and the minimization of costs; SIFMA notes that the expansion of portfolio margining is also a goal of the Dodd-Frank Act, and urges the CFTC not to implement Section 4d(f)(2) in such a way that would hinder the expansion of portfolio margining goal.