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    The proposed rules would not impose margin requirements on commercial end users, defined as non-financial entities. Commercial end users would be permitted to post non-cash collateral to the extent permitted in privately negotiated agreements with swap dealers and major swap participants. The rules would apply to uncleared swaps entered into after the effective date of the regulation and would not apply retroactively. The Commission consulted with other US authorities, including prudential regulators and the SEC, in developing these proposed rules.

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    The proposed rules would not impose margin requirements on commercial end users, defined as non-financial entities. Commercial end users would be permitted to post non-cash collateral to the extent permitted in privately negotiated agreements with swap dealers and major swap participants. The rules would apply to uncleared swaps entered into after the effective date of the regulation and would not apply retroactively. The Commission consulted with other US authorities, including prudential regulators and the SEC, in developing these proposed rules.

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    522 views1 page

    Um Qa

    Uploaded by

    MarketsWiki
    The proposed rules would not impose margin requirements on commercial end users, defined as non-financial entities. Commercial end users would be permitted to post non-cash collateral to the extent permitted in privately negotiated agreements with swap dealers and major swap participants. The rules would apply to uncleared swaps entered into after the effective date of the regulation and would not apply retroactively. The Commission consulted with other US authorities, including prudential regulators and the SEC, in developing these proposed rules.

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    Commodity Futures Trading Commission

    Office of Public Affairs


    Three Lafayette Centre
    1155 21st Street, NW
    Washington, DC 20581
    www.cftc.gov

    Q & A – Proposed Rules Regarding Margin for Uncleared Swaps


    Would the proposed rules impose margin requirements on commercial end users?

    No. The rules would not impose any margin requirements on commercial end users, defined under the proposed
    rules as non-financial entities. The proposed rules would distinguish between financial entities and non-financial
    entities. The definition of financial entity is based on section 2(h)(7)(C) of the Commodity Exchange Act, which
    addresses the exemption from mandatory clearing. An SD/MSP would collect initial and variation margin from a
    non-financial entity only to the extent the parties had mutually agreed to this in their privately-negotiated credit
    support arrangements.

    Would commercial end users be permitted to post non-cash collateral with SD/MSPs?

    Yes. Commercial end user, defined as non-financial entities, would be permitted to post non-cash collateral to the
    extent permitted in their privately-negotiated credit support arrangements.

    What products would the proposed rules cover?

    The rules would apply to uncleared swaps entered into after the effective date of the regulation. The proposal
    would not apply retroactively.

    Did the Commission consult with other US authorities in developing these rules?

    Yes. Staff of the Commission consulted with staff of the Federal Reserve Board, the Office of the Comptroller of
    the Currency, the Federal Deposit Insurance Corporation, the Farm Credit Administration, and the Federal
    Housing Finance Agency (collectively, the prudential regulators) in developing these rules. Staff of the Securities
    and Exchange Commission also participated in these consultations. The Commission and the prudential regulators
    have attempted to make their respective proposals comparable to the maximum extent practicable.

    Commodity Futures Trading Commission ♦ Office of Public Affairs ♦ 202-418-5080

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