Comment Text:
Meeting with Morgan Stanley
Tuesday, April 05, 2011
Memo from
Kneller, Theodore
CFTC Staff :
Phyllis Cela
Ananda Radhakrishnan
Peter Sanchez
Katie Driscoll
Ted Kneller
External Attendees :
Soo-Mi Lee
Nancy King
William McCoy
James Hill
Rick Ostrander
Candice Koederitz
Additional Information :
The external attendees expressed general concerns about the proposed Business Conduct Standards rules and addressed the following issues:
1. The proposed Business Conduct Standards rules under the Commission’s discretionary rulemaking authority should be self-regulatory organization rules rather than Commission rules.
2. The proposed Business Conduct Standards rules may create liability for a swap dealer under a private right of action.
3. The proposed trading ahead rule should be limited to executable orders.
4. A swap dealer should only be subject to the proposed rule regarding “swap dealer that acts as an advisor to a Special Entity” if the swap dealer and Special Entity agree that the swap dealer is its advisor.
5. Adoption and implementation of the proposed execution standards should be delayed to allow time for swap execution facilities to develop.
6. Comments on Swap Trading Relationship Documentation Requirements: Agreement on swap valuation methodologies is impractical as counterparties may have legitimately different views on the value of a swap. Focus should instead be on dispute resolution and ISDA has been working with the industry to develop a uniform dispute resolution methodology.
7. Comments on Confirmation, Portfolio Reconciliation, and Portfolio Compression Requirements: One business day for swap valuation dispute resolution is not workable. ISDA has been working with the industry to develop a uniform dispute resolution methodology.
