Former CFTC Senior Trial Attorney and Murphy & McGonigle partner Katherine Cooper contends that if certain modifications are made to the Commodity Futures Trading Commission’s controversial proposed new minimum capital requirements for SDs and MSPs, “it will have been worth the wait” in an article in the new edition of The Review of Securities & Commodities Regulation.
Ms. Cooper’s article, “Proposed Swap Dealer Capital Requirements: The CFTC’s Long Path Towards A More Risk Based Approach,” appears in the Aug. 15, 2018 issue, reviews the CFTC proposal for minimum capital requirements for SDs and MSPs and explores the industry criticism they have received. She concludes that, with improvements, the final regulations will be more effective in achieving risk-based outcomes for required minimum capital.
The article looks at issues raised by the proposed new rules, including the use of initial margin for cleared swaps, reliance on notional amounts, the potentially negative effect on smaller SDs, inconsistency with the SEC’s proposed capital rule, duplicative reviews for internal capital models, and reporting requirements.
Ms. Cooper states in the article, “Billions of capital will not be removed unnecessarily from the global markets and the capital required to be held by swap dealers will begin to be ‘calibrated to the amount of capital which is needed to be kept in global markets to support the health and durability of the global financial system.’”
A member of Murphy & McGonigle’s leading FinTech & Blockchain Practice, Ms. Cooper most recently served as the Chief Regulatory Officer of NYSE Liffe US, a CFTC-registered futures exchange. In that role, she advised the Board and senior management on the extensive changes made to the Commodity Exchange Act and Commodity Futures Trading Commission’s regulations by the Dodd-Frank Act and related rulemakings.
The article can be found here: http://www.rscrpubs.com/Cover_Cooper_RSCR_8-15-18.pdf