SFIG Submits Request for Delayed Variation Margin Compliance

On Monday, February 6th, SFIG submitted a letter request to the Commodity Futures Trading Commission (CFTC) and the prudential regulators seeking temporary relief for legacy securitization transactions from the compliance date for variation margin requirements.

In short, after March 1, 2017, if a counterparty to a legacy securitization transaction is replaced or the swap is otherwise materially amended, the resulting new swap will be subject to two-way variation margin requirements.  Because legacy securitization transactions were not structured in a manner that facilitates posting variation margin, SFIG is requesting a six-month temporary stay from the March 1, 2017 variation margin requirements for legacy securitization swaps. 

SFIG previously submitted a request to CFTC for no-action relief from certain CFTC regulations in connection with legacy SPV swaps.

If you would like to join SFIG's Derivatives in Securitization Task Force, please contact Alyssa.Acevedo@sfindustry.org.

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