The American Bankers Association joined a coalition of financial trade groups last week welcoming action by financial regulators to provide regulatory relief to swaps market participants during the pandemic. The groups welcomed an interim final rule taking effect today that extends the compliance date of the initial margin requirements to Sept. 1, 2021, for swap entities and counterparties with average annual notional swap portfolios of $50 billion to $750 billion, and to Sept. 1, 2022, for counterparties with average annual notional swap portfolios of $8 billion to $50 billion.
“While our members have robust business continuity plans in place that are functioning well, given the overwhelmingly disruptive nature of the pandemic, our members’ efforts to prepare for the final phases of regulatory IM have been severely impacted due to personnel, systems and other issues,” the groups said. “Although the derivatives industry has adjusted to alternative working situations, the length and severity of the ongoing impact to operations cannot be predicted.”
The groups also said they supported recent Commodity Futures Trading Commission proposals to consider a recent Margin Subcommittee Report from the agency’s Global Markets Advisory Committee. “We request that the Agencies amend the Margin Rules to align with any amendments that the CFTC adopts from the August 14, 2020, NPRs in order to effect domestic and global harmonization and provide regulatory clarity and certainty to prudentially-regulated [covered swap entities]and their covered counterparties,” the associations said.