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    CFTC Approves Position Limit and Initial Margin Compliance Date Rules

    November 09, 2020

    CFTC, at its open meeting, approved a final rule on position limits for derivatives and a final rule to delay the compliance date of September 01, 2021 to September 01, 2022 for the initial margin requirements for smaller entities under the CFTC Margin Rule. The final rule on position limits for derivatives amends regulations of speculative position limits to conform with certain Dodd-Frank amendments to the Commodity Exchange Act. The final rule on position limits will become effective 60 days after its publication in the Federal Register while the final rule on initial margin requirements for entities with smaller portfolios will become effective on December 09, 2020. CFTC also approved a final rule that amends CFTC Regulation 3.10(c), which provides exemptions from intermediary registration under certain conditions to foreign-located persons, in connection with their U.S. commodity interest transactions conducted on behalf of persons located outside the US. This final rule will become effective 60 days after its publication in the Federal Register.

    Rule on Position Limits for Derivatives

    Among other things, CFTC adopted:

    • New and amended federal spot month position limits for derivatives contracts associated with 25 physical commodities
    • Amended single-month and all-months-combined limits for most of the agricultural contracts currently subject to federal position limits
    • New and amended definitions for use throughout the position limits regulations, including a revised definition of “bona fide hedging transaction or position” and a new definition of “economically equivalent swaps”
    • Amended rules governing exchange-set limit levels and grants of exemptions therefrom
    • A new streamlined process for bona fide hedging recognitions for purposes of federal position limits
    • New enumerated bona fide hedges
    • Amendments to certain regulatory provisions that would eliminate Form 204 while also enabling CFTC to leverage and receive cash-market reporting submitted directly to the exchanges by market participants

    Rule on margin requirements for uncleared swaps for swap dealers and major swap participants (Phase VI Compliance Date Extension)

    CFTC approved a final rule that amends the margin requirements for uncleared swaps for swap dealers and major swap participants for which there is no banking regulator. The final rule extends the initial margin implementation schedule for entities with smaller uncleared swap portfolios from September 01, 2021 to September 01, 2022, to avoid market disruption due to the large number of entities that would have been required to comply with the initial margin requirements by September 01, 2021. This final rule is effective on December 09, 2020.


    Effective Date: December 09, 2020/FR+60 Days

    Keywords: Americas, US, Banking, Securities, Swaps, Derivatives, Initial Margin, Compliance Date, Position Limits, Dodd-Frank Act, Basel, CFTC

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