While at the SEC, Mr. Bussey was very involved in the creation of the SEC's rulemakings governing cross-border swaps activities. The SEC's rulemaking process produced a set of rules that were much clearer in their requirements than the CFTC's guidance on the subject, which relied heavily on a "facts and circumstances" approach to jurisdiction, often with little guidance as to what circumstances were actually meaningful. Mr. Bussey's experience with cross-border rulemaking at the SEC may help…

In a somewhat cryptically worded letter, the SEC staff clarified that securities that have no lending value for purposes of the broker-dealer margin regulations, but that serve to collateralize a margin loan, may be rehypothecated by a broker-dealer. Any such rehypothecation would of course remain subject to the limits set out in Rule 15c3-3, which are intended to ensure that even an insolvent broker-dealer be able to make its custodial customers whole.

Mr. Mohamed is a compelling speaker. His address at the Credit Division's annual conference provided valuable insight on this fast-moving space.

The facts in the Letter are quite sparse, which makes it difficult to understand why relief was necessary. First, it is not clear from the Letter that the entity entering into swaps was an investment vehicle and, thus, why it would be considered a commodity pool as opposed to an operating company. Second, even if the entity was a fund, the Letter does not address why the vehicle could not rely on an existing registration exemption under the CFTC Rules, for example, the limited trading…