External Meetings: Meeting with Markit

On June 7, 2011, staff met with Markit to discuss various aspects of their comment letters relating to real-time reporting.  ~Method of Public Dissemination~Markit mentioned that the CFTC’s real-time proposal would lead to more fragmentation than the SEC’s proposal since the SEC’s proposal mandates public dissemination through an SDR.  Markit suggests that real-time reporting should be mandated through an SDR (giving the SDR the ability to delegate the dissemination to a third party).~Normalization of Pricing~Markit also discussed their views on how to deal with pricing for situations where there is no standardization – mentioned the idea of converting to equivalents.~Condition Flags~Markit stated that displaying a risk category as part of public dissemination will not help; however displaying a price for credit risk would be more helpful.  There should be a condition flag for index arbitrage swaps (where one leg is an index and the other leg is the single names in the index).~Harmonizing Reporting with the SEC~Markit stated that harmonization is particularly important for index swaps.