External Meetings: Meeting with Banks

The meeting discussed the application of Dodd-Frank Act requirements, particularly to cleared swaps, including the timing of implementation of various requirements.  Citi, Morgan Stanley and JP Morgan expressed the view that a clearing mandate should be applied after a critical mass of dealers are ready to clear swaps for clients, and that differentiated margin requirements for uncleared swaps should apply only after clearing is mandated and is well underway.  Citi, Morgan Stanley and JP Morgan also expressed the view that the Dodd-Frank Act requirements should not necessarily apply to swaps entered into between their affiliates or branches located outside the U.S. and swap counterparties that are also located and organized outside the U.S.  In addition, JP Morgan summarized its view that the block trade sizes resulting from the application of the formula provided in the Commission’s real-time reporting rulemaking for determining the appropriate minimum block trade size would be much too high and they suggested an alternative formula.