CFTC Proposes Rule for Margin on Cross-Border Uncleared Swaps

The Commodity Futures Trading Commission today issued a proposal on when margin requirements would apply to uncleared swap transactions in a cross-border context.

The CFTC describes the proposed approach as a hybrid of the entity- and transaction-level approaches found in the agency’s advance notice of proposed rulemaking last fall. When finalized, the rule will apply to CFTC-registered swap dealers and major swap participants that do not have a prudential regulator, while the prudential regulators’ proposal describing margin requirements for uncleared swaps contains its own cross-border framework.

ABA’s new Center for Bank Derivatives Policy expects to comment on the proposal; comments are due 60 days after publication in the Federal Register. For more information, or to participate in ABA’s advocacy on this issue, contact ABA’s Jason Shafer.