EXTERNAL MEETINGS: MEETING WITH MANAGED FUNDS ASSOCIATION

On December 8, 2010, Commission staff had a meeting with MFA to discuss MFA’s preliminary views on the real-time public reporting rulemaking.  MFA indicated that they intend to submit a more detailed comment letter to the Commission with respect to the real-time public reporting rulemaking.~ ~Public disclosure of swap transaction and pricing data~The biggest concern is about public disclosure of firms through the real-time information that is being reported.  Certain buy-side firms may consider such information proprietary and there is a concern that if certain information is disclosed, then it may divulge trading strategies.~ ~Public disclosure of block trade/large notional swap information~Suggest that a cap on the notional amount should be implemented (like in the corporate bond market).~ ~Reporting for customized swaps~(i) CFTC should define customized swaps as those swaps that are not clearable or traded on a SEF or DCM; ~(ii) Customized swaps should get greater time for real-time reporting (For example, end-of-day or T+1); ~(iii) Concerned that if real-time reporting requirements are too onerous, dealers might not be willing to offer bespoke transactions to the buy-side.~ ~Error trades~(i) There should be some sort of dispute resolution procedure for correcting error trades;   ~(ii) There will be fewer errors if the swaps are reported end-of-day or T+1.~ ~Data fields~(i) Concern over the requirement of reporting additional data fields from the DTCC standard that is currently required.  There is a fear that dealers will pass additional cost on to buy-side firms; ~(ii) Expressed concern over the reporting of terms that were too specific for bespoke transactions since doing so could divulge proprietary information; ~(iii) When real-time reporting that a swap is bespoke, perhaps there should be some additional indication of what makes the transaction bespoke; ~(iv) Believe that certain terms for non-standardized swaps can be thought of as proprietary.  The concern is that there could be some reverse engineering of the swap.