The CFTC is requesting comments to assist it in the preparation of a joint study with the SEC, required under Section 719(b) of the Dodd-Frank Act, on the feasibility of requiring the derivatives industry to adopt standardized computer-readable algorithmic descriptions that may be used to describe complex and standardized derivatives and calculate net exposures. These algorithmic descriptions are intended to facilitate computerized analysis of individual derivative contracts and to calculate net exposures to complex derivatives, and are to be optimized for simultaneous use by:
- commercial users and traders of derivatives;
- derivative clearing houses, exchanges and electronic trading platforms;
- trade repositories and regulator investigations of market activities; and
- systemic risk regulators.
The study also will consider the extent to which the algorithmic descriptions, together with standardized and extensible legal definitions, may serve as the binding legal definition of derivative contracts.
Comments must be received on or before December 31, 2010.