November 26, 2018

CFTC is adopting amendments to the margin requirements for uncleared swaps for swap dealers (SDs) and major swap participants (MSPs), for which there is no prudential regulator. CFTC is adopting these amendments in light of the recently adopted rules by FED, FDIC, and OCC (collectively, the qualified financial contract or QFC rules) that impose restrictions on certain uncleared swaps, uncleared security-based swaps, and other financial contracts. The rule will be effective from December 26, 2018.

CFTC is amending the definition of “eligible master netting agreement” in the CFTC Margin Rule to ensure that master netting agreements of firms subject to the CFTC Margin Rule are not excluded from the definition of eligible master netting agreement based solely on such agreements' compliance with the QFC rules. CFTC is also amending the Margin Rule such that any legacy uncleared swap (that is, an uncleared swap entered into before the applicable compliance date of the CFTC Margin Rule) that is not now subject to the margin requirements of the CFTC Margin Rule will not become so subject if it is amended solely to comply with the QFC rules. These amendments are consistent with amendments that FED, FDIC, OCC, the Farm Credit Administration (FCA), and the Federal Housing Finance Agency (FHFA) jointly published in the Federal Register on October 10, 2018.

CFTC had published the proposal for amendments to the margin requirements in May 2018. The comment period for the proposal ended in July 2018. CFTC received four relevant comments in response to the proposal. Though the comments raised issues unrelated to the proposal or suggested additions that would go beyond the scope of the proposal, the comments were generally supportive of the aims of the proposal. The final rule is consistent with rule changes recently adopted by the Prudential Regulators to the Prudential Margin Rule and addresses suggestions received as part of the CFTC’s Project KISS [“Keep It Simple, Stupid”] initiative for the CFTC to harmonize its uncleared swap margin regime with that of the Prudential Regulators.

 

Related Link: Final Rule

Effective Date: December 26, 2018

Keywords: Americas, US, Banking, Qualified Financial Contracts, Swap Margin Rule, Swap Dealers, Major Swap Participant, CFTC

Related Articles
News

FSB to Evaluate Effects of Too-Big-To-Fail Reforms for Systemic Banks

FSB is seeking feedback as part of its evaluation of the effects of the too-big-to-fail reforms for banks.

May 23, 2019 WebPage Regulatory News
News

APRA Releases Minor Changes to Reporting Standards on SA-CCR for Banks

APRA released minor changes to the three reporting standards for the standardized approach for measuring counterparty credit risk exposures (SA-CCR).

May 22, 2019 WebPage Regulatory News
News

APRA on Industry Self-Assessments into Governance and Accountability

APRA released an information paper analyzing the self-assessments performed by 36 of the country’s largest banks, insurers, and superannuation licensees in response to the final report on the Prudential Inquiry into the Commonwealth Bank of Australia (CBA).

May 22, 2019 WebPage Regulatory News
News

PRA Consults on Maintenance of TMTP Under Solvency II

PRA published a consultation paper (CP11/19) that sets out its approach to update supervisory statement (SS6/16) on maintenance of the transitional measure on technical provisions (TMTP) under Solvency II.

May 22, 2019 WebPage Regulatory News
News

APRA Proposes to Amend Guidance on Residential Mortgage Lending

APRA is consulting on revisions to the prudential practice guide APG 223 on residential mortgage lending in Australia.

May 21, 2019 WebPage Regulatory News
News

IASB Proposes Improvements to IFRS 9 and IFRS 16

IASB published the exposure draft ED 2019/2 that proposes amendments to four IFRS standards, including IFRS 9 on Financial Instruments and IFRS 16 on Leases.

May 21, 2019 WebPage Regulatory News
News

Denis Beau of BDF on Supervisory Priorities for Climate-Change Risks

Denis Beau, the First Deputy Governor of BDF, delivered opening remarks at the BCBS-BSCEE-FSI High-level Meeting for Europe on banking supervision.

May 21, 2019 WebPage Regulatory News
News

ISDA CDM to be Deployed for UK Digital Regulatory Reporting Pilot

ISDA announced deployment of the ISDA Common Domain Model (ISDA CDM 2.0) to support the UK FCA, BoE, and participating financial institutions in testing phase two of the Digital Regulatory Reporting pilot for derivatives.

May 21, 2019 WebPage Regulatory News
News

MAS to Consolidate Regulation of Merchant Banks Under Banking Act

MAS published a consultation paper that proposes to consolidate the regulation of merchant banks under the Banking Act and to move merchant banks to a licensing regime under the MAS Act.

May 21, 2019 WebPage Regulatory News
News

ESAs Amend Technical Standards on Mapping of ECAIs Under CRR

ESAs published a second amendment to the implementing technical standards on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk under the Capital Requirements Regulation (CRR).

May 20, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3118