Comment Text:
September 6, 2012
Via Electronic Submission
David A. Stawick
Secretary of the Commission
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street NW
Washington, DC 20581
Re: Clearing Requirement Determination Under Section 2(h) of the CEA
RIN Number 3038–AD86
Dear Mr. Stawick,
I am a part of the Rates Group at CRT Capital Group LLC, a registered broker-dealer that cur-rently makes markets in US Government and Agency Bonds. We hope to expand our market making capabilities to include USD Interest Rate Swaps. Before joining CRT, I ran the USD Swap trading desk for Goldman Sachs, and prior to that I held the same role at RBS Greenwich Capital. I am looking forward to the final implementation of Clearing and Swap Execution rules outlined in the Dodd Frank legislation.
CRT strongly supports the Commodity Futures Trading Commission’s proposed Clearing Re-quirement Determination Under Section 2(h) of the CEA (the “Determination”).
I
mplementing the mandatory clearing requirement for these liquid and standardized segments of the swaps markets is a significant milestone towards achieving the Dodd-Frank Act’s objectives of reducing interconnectedness, mitigating systemic risk, increasing transparency, and promoting competition in the swaps market – all essential steps towards restoring the safety and soundness of our financial markets.
The specific fixed-to-floating swaps, basis swaps, FRAs, and OIS listed in proposed §50.4 easily satisfy the five statutory factors that the Commission is required to consider for clearing re-quirement determinations, as the Commission’s analysis demonstrates. These swaps are all cleared today in material volumes and we thus agree with the Commission that “there is already a blueprint for clearing and appropriate risk management.” We recommend that the Commission maintain the full proposed product scope in its final Determination.
We urge the Commission to conclude its review and issue its final Determination as expeditiously as possible within the 90 day review period so the market can finally benefit from the imple-mentation of mandatory central clearing.
Sincerely,
Bart Sokol
CRT Capital Group LLC
