September6,2012 DavidA.

Stawick SecretaryoftheCommission CommodityFuturesTradingCommission ThreeLafayetteCentre 115521stStreetNW Washington,DC20581 Re: ClearingRequirementDeterminationUnderSection2(h)oftheCEARINNumber3038AD86

DearMr.Stawick, The Swaps & Derivatives Market Association (SDMA) strongly supports the Commodity Futures TradingCommissions(theCommission)proposedClearingRequirementDeterminationUnderSection 2(h)oftheCEA1(theDetermination)forcertainclassesofcreditdefaultswaps(CDS)andinterestrate swaps(IRS). TheSDMAisanonprofitfinancialtradegroupformedin2010tosupportthegoalsoftheDoddFrank Act. It believes that systematic risk of OTC derivatives can be mitigated through their regulation, the creationofcentralclearing,andbyensuringopenandtransparentaccesstoensuregreatercompetition, lower transaction costs and greater liquidity. The SDMA is comprised of many US and internationally based brokerdealers, investment banks, futures commission merchants and asset managers participating in all segments of the exchangetraded and overthecounter derivatives and securities markets. Implementing the mandatory clearing requirement for these liquid and standardized segments of the swapsmarketsisasignificantmilestonetowardsachievingtheDoddFrankActsobjectivesofreducing interconnectedness,mitigatingsystemicrisk,increasingtransparency,andpromotingcompetitioninthe swapsmarketallessentialstepstowardsrestoringthesafetyandsoundnessofourfinancialmarkets. The specific fixedtofloating swaps, basis swaps, FRAs, and OIS as well as CDX and iTraxx CDS indices listed in proposed 50.4 easily satisfy the five statutory factors that the Commission is required to

77FedReg.4717047222(August7,2012)

 considerforclearingrequirementdeterminations,astheCommissionsanalysisdemonstrates.2These swapsareallclearedtodayinmaterialvolumesandwethusagreewiththeCommissionthatthereis already a blueprint for clearing and appropriate risk management.3 We recommend that the CommissionmaintainthefullproposedproductscopeinitsfinalDetermination. We urge the Commission to conclude its review and issue its final Determination as expeditiously as possiblewithinthe90dayreviewperiodsothemarketcanfinallybenefitfromtheimplementationof mandatorycentralclearing. Sincerely, /s/JamesCawley JamesCawley BoardMember TheSwaps&DerivativesMarketAssociation

Insummary,thefivefactorsarethe(i)outstandingnotionalexposures,tradingliquidity,andadequatepricing data;(ii)availabilityofruleframework,capacity,operationalexpertiseandresources,andcreditsupport infrastructure;(iii)effectonthemitigationofsystemicrisk;(iv)effectoncompetition;and(v)legalcertaintyinthe eventofinsolvency. 3 SeeId.at47172

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