CFTC Votes on Margin for Uncleared Swaps Final Rule

This morning, December 16th, the U.S. Commodities Futures Trading Commission (“CFTC”) approved their final rule regarding margin requirements for uncleared swaps by a vote of 2-1.

In late October, the prudential regulators approved a Joint Final Rule on Swap Margin Requirements. This joint rule was issued by the Office of the Comptroller of the Currency, the Federal Reserve Board, the Farm Credit Administration and the Federal Housing Finance Agency and applies to entities supervised by any of these agencies.

SFIG previously advocated for securitization special purpose vehicles (“SPVs”) to qualify as “low risk financial end users,” presented criteria for such an exemption and highlighted the impact the rules would have on the securitization industry. SFIG members and staff also met with Congressional staff this past October to discuss the rule's applicability to almost all SPVs and the impact on the financing activities of consumer lenders who extend credit in major asset classes, such as credit cards, auto loans and equipment leases.

Once the final rule has been published by the CFTC, we will be sure to circulate it to our Derivatives in Securitization Task Force. If you are interested in joining this task force, please contact Alyssa Acevedo.

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