2020-18303: Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants

Summary

The Commodity Futures Trading Commission ("Commission" or "CFTC") is proposing to amend the margin requirements for uncleared swaps for swap dealers ("SDs") and major swap participants ("MSPs") for which there is no prudential regulator ("CFTC Margin Rule"). In particular, the Commission is proposing to revise the calculation method for determining whether certain entities come within the scope of the initial margin ("IM") requirements under the CFTC Margin Rule beginning on September 1, 2021, and the timing for compliance with the IM requirements after the end of the phased compliance schedule. The proposed amendment would align certain aspects of the CFTC Margin Rule with the Basel Committee on Banking Supervision and Board of the International Organization of Securities Commissions' ("BSBS/IOSCO") Framework for margin requirements for non-centrally cleared derivatives ("BCBS/IOSCO Framework"). The Commission is also proposing to allow SDs and MSPs subject to the CFTC Margin Rule to use the risk-based model calculation of IM of a counterparty that is a CFTC-registered SD or MSP to determine the amount of IM to be collected from the counterparty and to determine whether the IM threshold amount for the exchange of IM has been exceeded such that documentation concerning the collection, posting, and custody of IM would be required.

The agency’s own summary, as published.

What this changes

Amends 1 part of the Code of Federal Regulations — the standing rules this notice rewrites.

• 17 CFR 23 Swap Dealers and Major Swap Participants