Friday, December 11, 2020
CFTC Unanimously Approves Closing Guidelines Associated to Margin Necessities for Uncleared Swaps for Swap Sellers and Main Swap Contributors
On December 8, the Commodity Futures Buying and selling Fee (CFTC) unanimously authorized two ultimate guidelines associated to margin necessities for uncleared swaps for swap sellers (SD) and main swap individuals (MSP).
The CFTC authorized a ultimate rule that amends the margin necessities for uncleared swaps for SDs and MSPs for which there isn’t a prudential regulator (CFTC Margin Rule). The ultimate rule permits the applying of a minimal switch quantity (MTA) as much as $50,000 for every individually managed account of a authorized entity that may be a counterparty to an SD or MSP in an uncleared swap transaction and permits the applying of separate MTAs for preliminary margin and variation margin.
Moreover, the CFTC authorized a ultimate rule amending the CFTC Margin Rule’s definition of fabric swaps publicity (MSE) by revising the strategy for calculating the typical combination notional quantity of uncleared swaps and different monetary merchandise (AANA) for figuring out MSE. Particularly, the ultimate rule adjustments the interval for calculating AANA from June, July and August of the prior yr, to March, April and Might of the present yr, requiring the averaging of month-end AANA as a substitute of each day AANA over the three-month calculation interval. The ultimate rule additionally establishes September 1 of every yr because the date for figuring out MSE after the top of the phased compliance schedule for preliminary margin.
Every rule is efficient 30 days after publication within the Federal Register.
The ultimate guidelines can be found right here.
CFTC Unanimously Approves Closing Guidelines Associated to SEFs and Withdraws Complete Proposals
On December 8, the Commodity Futures Buying and selling Fee (CFTC) authorized a ultimate rule amending Half 37 of the CFTC Rules addressing operational points going through swap execution amenities (SEF) and their market individuals in reference to the CFTC’s regulatory necessities for a SEF’s audit path knowledge, monetary sources, and chief compliance officer (CCO). Particularly, the Closing Rule (1) eliminates the requirement for a SEF to seize and retain post-execution allocation data in its audit path knowledge, (2) applies the present Core Precept 13 monetary sources necessities to SEF operations in a much less burdensome method, and (3) streamlines necessities for the CCO place and permits SEF administration to train better discretion in CCO oversight.
Moreover, the CFTC authorized a ultimate rule establishing two exemptions from the requirement to execute sure sorts of swaps on a SEF or a chosen contract market. The primary such exemption applies to a swap that meets the necessities of any exception or exemption below half 50 of the CFTC laws. The second commerce execution exemption codifies aid supplied below CFTC Letter No. 17-67 and different employees letters, and applies to a swap that’s entered into by eligible affiliate counterparties and cleared, whatever the associates’ means to say the inter-affiliate clearing exemption below CFTC Regulation Half 50.52.
The CFTC additionally withdrew extra complete proposals to overtake the SEF regulatory framework.
The press launch and entry to the ultimate guidelines can be found right here.
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