How to Become a Member of the DCs

There are five Determinations Committees (“DCs”), one for each of the Americas, EMEA (Europe), Australia New-Zealand, Asia excluding Japan and Japan. Each DC is formed of up to ten voting dealer members, five voting buyside (non-dealer) members and three non-voting members (two dealers and one buyside). A DC may also include as non-voting members one or more credit derivatives central clearing counterparties (“CCP”). The Credit Derivatives Determinations Committees Rules published by the DC Secretary (the “DC Rules”) govern the annual process for determining the constitution of the DCs, which culminates in the selection of the DC members on or about March 30 each year (the “List Review Date”).

Below is a brief description of the process for joining the DCs. This is not intended to be a complete summary of the process, and is subject to the DC Rules in all respects.

Dealer firms

Firms that would like to be considered as dealer members on the DCs must submit a signed Dealer Participation Letter to the DC Secretary approximately 6 weeks before the List Review Date. The current form of Dealer Participation Letter is available below. Once a firm has submitted a Dealer Participation Letter, it will be added to the List of Participating Dealer Institutions. Depository Trust & Clearing Corporation (“DTCC”) will examine the credit derivative trading volume data to determine which firms on the List of Participating Dealer Institutions will be selected for membership in accordance with the DC Rules and the Trading Volume Data Guidelines.

Buyside (Non-dealer) firms

Firms that would like to be considered as non-dealer members on the DCs must first join the Non-dealer Committee. To join the Non-dealer Committee, a firm must submit a signed Non-dealer Committee Participation Letter to the DC Secretary together with a written summary of its experience in the credit derivatives market and written certification that it satisfies the assets under management and credit derivative volume requirements in Section 1(b) of Schedule 2 to the DC Rules. The letter must be submitted approximately 3 weeks before the List Review Date. The current form of Non-dealer Committee Participation Letter is available below. Following submission of the letter, the firm will be added to the Non-dealer Committee unless its application is denied by a two-thirds vote of the current Non-dealer Committee members.

Existing Non-dealer Committee members must also recertify annually that they meet the credit derivative volume requirements in Section 1(b)(ii) of Schedule 2 to the DC Rules. The certification must be provided approximately 3 weeks before the List Review Date. The current form of this letter is available below.

Non-dealer members of the DCs are then selected on the List Review Date in accordance with the relevant provisions of the DC Rules, which fill positions taking into account any prior participation on the DCs and then using a random drawing of eligible non-dealer firms.

For the avoidance of doubt, no firm may be considered for membership on the DCs as both a Dealer and a Non-dealer.

CCP Involvement

A CCP that would like to be considered for consultative membership of one or more DCs must submit a CCP Participation Letter notifying the DC Secretary of the applicable Region(s) in which it wishes to be considered for DC membership and agreeing to provide each relevant data repository with all necessary consents to effect the selection process under the DC Rules. The current form of CCP Participation Letter is available below. CCPs can either join the DCs as part of the List Review Date process, based on cleared credit derivative transaction volume as determined under the CCP Data Guidelines, or at other times by a majority vote of the relevant DC.