Disscussion of implementation issues for LEI/UCI.

The participants discussed various issues related to position limits, including deliverable supply, conditional limits, aggregation and hedging.

Representatives of Nomura provided views as to one of the questions posed by the Commission in a recent Federal Register release proposing capital requirements for swap dealers. Nomura recommended that the Commission consider several factors, including experience of firm in using models, in assessing whether to approve or accept internal models that have been approved by foreign regulators for computing market risk and counterparty credit risk.

Convexity Capital Management identified particular questions in the jointly adopted sections of Form PF that may present difficulties.  Convexity explained how these questions, as proposed, may fail to capture or may incorrectly capture information about certain private funds.
 
Convexity will follow this conversation with a comment letter.

Participants discussed position limits and the CFTC's proposed rules on removing certain exemptions for CTA's & CPO's.

The meeting discussed the definition of hedging and mitigating commercial risk in connection with the definition of major swap participant (MSP), in particular focusing on the distinction between using swaps to hedge commercial risk and for speculation, investment or trading.  Vitol sought clarification of a sentence in footnote 128 of the proposing release which states that “Swap positions that hedge other positions that themselves are held for the purpose of speculation or trading are also speculative or trading positions.”  Vitol said the rule should clarify this distinction

In the meeting, Gavilon said that the final rule defining “swap dealer” should clarify when a company that uses swaps for more than one purpose would be deemed a swap dealer.  In particular, Gavilon explained that it uses swaps primarily to hedge commercial risks related to its agricultural commodity and energy commodity businesses, but that it also occasionally uses swaps to seek a proprietary profit.  Gavilon said the final definition should provide that a company would not necessarily be a swap dealer simply because it uses swaps for purposes other than to hedge commercial r

Participants discussed swap reporting requirements generally and the fact that ISDA has put out a request for proposal to industry participants for a trade repository that would beginning collecting financial oil swaps by 2012.  Also, particpants discussed data standards and other public reporting.

Roundtable discussion with DTCC Board Members and management relating to Dodd-Frank and provisions concerning the registration and regulation of swap data repositories

The participants discussed various issues related to DCO risk rules, customer positions, straight through processing, and a timeline for implementation.