External Meetings: Meeting with Cypress and three Credit Derivative Products Companies (CDPCs)

The meeting took place at the offices of the CFTC in Washington, D.C.  Josh Kans (SEC) and Richard Grant (SEC) joined by telephone conference. The external attendees discussed with CFTC and SEC staff (1) whether CDPCs are likely to be covered by the definition of swap dealer or security based swap dealer and the extent of their run-off activities, (2) whether CDPCs are likely to be covered by the definition of major swap participant or major security based swap participant, (3) the CDPC business model, capital structure, leverage and relevant operating guidelines, (4) why CDPCs are unable to post collateral to counterparties, (5) the size and tenor of their investment portfolios, (6) types of outstanding transactions (e.g., single name CDS, managed portfolio or static broad based index) and (7) whether CDPCs pose systemic risk.