Regulatory Alerts2013-11-06 | 2013-26479Protection of Collateral of Counterparties to Uncleared Swaps; Treatment of Securities in a Portfolio Margining Account in a Commodity Broker Bankruptcy
The Commodity Futures Trading Commission issued final rules implementing Title VII of the Dodd-Frank Act to protect collateral posted by counterparties to swap dealers and major swap participants for uncleared swaps. The rules mandate that swap dealers and major swap participants notify counterparties of their right to require segregation of initial margin and maintain such collateral with an independent third-party custodian. Additionally, the rules clarify that securities held in portfolio margining accounts constitute customer property and account owners are customers under the Bankruptcy Code to ensure proper treatment in commodity broker bankruptcies.
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