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.