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FIA PTG comments on how swap dealer capital rules will affect liquidity

FIA PTG comments on how swap dealer capital rules will affect liquidity

24 May 2017 9:15pm EDT

FIA PTG submitted comments to the CFTC today regarding proposed capital requirements for swap dealers and major swap participants.  FIA PTG argued that the proposed rules would present a significant and unnecessary barrier to entry that would likely render it too costly for many existing and aspiring swap dealers to continue providing this service. Each FIA PTG member firm’s decision to participate in the swaps markets, and to what extent, is dependent upon a number of factors, not the least of which are the costs associated with compliance with the applicable regulations.

For this reason, FIA PTG urged the CFTC to carefully consider the impact of regulatory costs on the continued development of a more competitive and diverse swaps market, particularly as banks continue to evaluate the amount of liquidity they are able to provide. In this regard, an important cost consideration will be the capital requirements that the Commission ultimately applies to a swap dealer. FIA PTG encouraged the Commission to adopt capital requirements that more readily take into account portfolio margining, cleared instruments and financial models. 

The full letter is available here. 

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2017-05-24_Capital_Requirements_SDs_MSPs.pdf (284.04 KB)

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