Comment Text:
Memo from Aaron Brodsky
CFTC Staff: Riva Adriance, Nancy Markowitz, Nadia Zakir, Eileen Donovan, Jane Croessmann, Mauricio Melara, Jordan O’Regan, and Aaron Brodsky.
External Attendees: Kari Larsen, Richard Holbrook, and Michael Philipp
On February 16, 2011, Commission staff participated in a meeting with representatives from the Green Exchange LLC to discuss Core Principle 21—financial resource requirements for DCMs.
During the meeting, the Green Exchange and staff discussed the treatment of deferred and contingent liabilities for purposes of calculating the financial resource requirements in proposed § 38.1101(a), implementing Core Principle 21. The Green Exchange also sought clarification on what constitutes a “committed line of credit” under proposed § 38.1101(e), whether subordinated debt could be used to meet the financial resource requirements in proposed § 38.1101(a), and whether the valuation of financial resources has to be in accordance with GAAP accounting principles.
Additionally, the Green Exchange sought clarification regarding the relationship between the financial resources requirement in proposed § 38.1101(a) and the liquidity requirement in proposed § 38.1101(e), in particular, whether an unencumbered committed line of credit could be used to satisfy both of those requirements.
