CFTC Proposes Cross-Border Margin Rule
On June 29, the Commodity Futures Trading Commission voted unanimously to propose a rule that would apply the CFTC’s margin requirements for uncleared swaps in the context of cross-border transactions.
The proposal would divide swap dealers into four categories, depending on the degree to which they are connected to the U.S., and would apply the margin requirements in different ways to each category. The proposal also would establish a “substituted compliance” process for determining whether a non-U.S. swap dealer is subject to comparable requirements in its home jurisdiction.
CFTC Chairman Tim Massad said that approximately 60 firms would be subject to the proposal, of which more than half are subsidiaries of five U.S. bank holding companies. The proposal would apply only to swap dealers and major swap participants that are not sub
