Comment Text:
Deal All,
Attached please find the pdf of my joint submission to the CFTC regarding the EU comparability determination, to the CFTC and SEC regarding my respective petitions to ban the flip-clause-swap-contract, and to the three credit rating companies Fitch Ratings, Moody's Investors Service, and S&P Global Ratings regarding their in-use criteria and methodologies for CLO and re-packaged securities when a reference entity provides a flip-clause-swap-contract.
"Today’s joint submission urges four actions regarding the flip-clause-swap-contract.
"1. The CFTC and the SEC must permanently eradicate the flip-clause-swap-contract in the U.S.
"2. The CFTC must condition a capital comparability determination for regulated entities that operate in the EU on an outright prohibition against the regulated entities providing the flip-clause-swap-contract in the EU.
"3. The CFTC must protect U.S. persons, U.S. regulated entities, and the U.S. economy by rejecting “international comity” and “harmonization” as rationales to mirror non-U.S. policies that would harm U.S. persons, U.S. regulated entities, and the U.S. economy.
"4. In assigning credit ratings to U.S. and non-U.S. Collateralized Loan Obligations (CLOs),
re-packaged securities, and any debt that references a second, separate obligor, the credit rating companies Fitch Ratings, Moody’s Investors Service, and S&P Global Ratings must significantly decrease recovery rates for a bank, swap contract dealer, or other entity that provides a flip-clause-swap-contract."
