SEC, CFTC Approve Joint Rule Aligning Margin Levels for Security Futures

The Securities and Exchange Commission and the Commodity Futures Trading Commission approved a joint final rule today to harmonize their margin levels for security futures “whether they are held in a futures account, a securities portfolio margin account, or a securities account that is not approved for portfolio margining.”

“The Commissions are adopting the proposed margin requirement to set the required margin level for each long or short unhedged position in a security future at 15% of its current market value,” the agencies said as part of their first joint open meeting to vote on rulemaking initiatives. While there are currently no security futures contracts listed for trading on U.S. exchanges, the final rule amendments would set a 15% level for security futures “if an existing exchange were to resume operations or another exchange were to launch security futures contracts,” the agencies said.

The regulators also submitted a joint request for comment regarding possible 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 our financial system through adjustments to our current margin rules.”