A group of asset managers, hedge funds and proprietary managers issued an open letter to the Commodity Futures Trading Commission and the Securities and Exchange Commission on Tuesday, calling for the agencies to move quickly to implement Dodd-Frank swap-clearing requirements by the end of the year.
The Clearing Coalition, a group that includes Bank of New York Mellon Corp., D.E. Shaw & Co. and Citadel LLC warned in its letter that any delay would weaken markets, limit the U.S.’s ability to compete internationally, and retard economic growth.
The Dodd-Frank Act, signed into law in 2008, calls for a new regulatory structure wherein most swaps must be guaranteed by clearinghouses. Regulators, however, have been slow to phase in compliance requirements. According to the coalition, enough time has passed that “ industry preparations for the core reform of central clearing are at an advanced stage. [The rules will] assure new entrants that an open, competitive market is near at hand.”
The CFTC is expected to finish drafting the rules shortly. Among expected clarifications is which end-users of swaps will be exempt from clearing requirements.
