ISDA’s comment letter on general regulations and DCO

17 February 2011

ISDA submits the comments in response to the Notice of Proposed Rulemaking on General Regulations and Derivatives Clearing Organisations in which the CFTC solicited comments on its proposed rules to implement Section 725(c) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

ISDA believes that terms used in the cleared swap market should be clearly differentiated from terms used in the uncleared market when the definitions used are different.

ISDA is concerned that the definitions of “Initial Margin” and “Variation Margin” in the proposed rules are more appropriate to the futures markets and cleared derivatives, and less readily applicable in the uncleared OTC derivatives context. ISDA also believes that if these terms are to be used in this and other Commission rules that reference cleared transactions (whether futures or swaps), their use will create confusion with the equivalent concepts used in the uncleared OTC derivatives markets.

Full comment letter 

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