CFTC and SEC, at their first joint open meeting, approved a joint final rule to harmonize the minimum margin level for security futures held in a futures account with the minimum margin level for security futures held in a securities portfolio margin account. The final rule will be effective 30 days after its publication in the Federal Register. The agencies also approved the issuance of a joint request for comment on the portfolio margining of uncleared swaps and non-cleared security-based swaps. The public comment period will remain open for 30 days following publication in the Federal Register.
Final rule on margin requirements for security futures
CFTC and SEC are adopting rule amendments to lower the margin requirement for an unhedged security futures position from 20% to 15% and adopting certain conforming revisions to the security futures margin offset table. In July 2019, CFTC and SEC proposed to amend the security futures margin rules. CFTC and SEC sought to align margin requirements for security futures held in futures accounts and customer securities accounts that are not subject to the Portfolio Margin Rules with security futures and exchange-traded options held in customer securities accounts subject to the Portfolio Margin Rules. CFTC and SEC also proposed certain conforming revisions to the Strategy-Based Offset Table. CFTC and SEC received a number of comments in response to the proposal. After considering the comments, CFTC and SEC are adopting, as proposed, amendments to the security futures margin rules to lower the required initial and maintenance margin levels for an unhedged security futures position from 20% to 15%. CFTC and SEC are also publishing a revised Strategy-Based Offset Table as proposed.
Consultation on portfolio margining of uncleared swaps and security-based swaps
CFTC and SEC are seeking public comment on the potential ways to implement portfolio margining of uncleared swaps and non-cleared security-based swaps, including whether there are opportunities to enhance efficiencies, reduce complexity, increase consistency, and add resiliency to the financial system through adjustments to the current margin rules. CFTC and SEC are requesting comment on all aspects of the portfolio margining of uncleared swaps and non-cleared security-based swaps, including on the merits, benefits, and risks of portfolio margining these types of positions, and on any regulatory and operational issues associated with portfolio margining them. Additionally, comments are being solicited on specific aspects of the margining of uncleared swaps, non-cleared security-based swaps, and related positions.
Comment Due Date: FR+30 Days
Effective Date: FR+30 Days
Keywords: Americas, US, Banking, Securities, Portfolio Margining, Security Futures, Margin Rule, Swap, Security-Based Swaps, SEC
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