RegAlert2019-06-06 | CFTC Staff Letter 19-13Added · Updated
CFTC Staff Letter 19-13: No-Action Relief for Swap Dealers Regarding Legacy Swap Margin Requirements
The Division of Swap Dealer and Intermediary Oversight grants swap dealers no-action relief from uncleared swap margin requirements for specific amendments to Legacy Swaps, defined as swaps executed prior to applicable compliance dates. This relief covers immaterial amendments that do not affect economic obligations or valuation, swaps resulting from the exercise of Legacy Swaptions, remaining portions of swaps after partial terminations or partial novations, and new swaps from multilateral compression exercises involving only Legacy Swaps. The relief applies to swap dealers registered with the Commission and subject to its margin rules, provided specific conditions regarding recordkeeping, counterparty identity, and transaction parameters are met.
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CFTC Letter No. 19-13 No-Action June 06, 2019
Division of Swap Dealer and Matthew B. Kulkin
Intermediary Oversight Director
Re: No-Action Position: Application of Uncleared Swap Margin Rules to Immaterial Amendments, Swaption Exercises, Partial Terminations, Partial Novations, or Multilateral Compression of Legacy Swaps Ladies and Gentlemen:
This letter is in response to a request for a no-action position received by the Division of Swap Dealer and Intermediary Oversight (“DSIO”) of the Commodity Futures Trading Commission (“Commission”) from the International Swaps and Derivatives Association (“ISDA”) on behalf of its members that are swap dealers (“SDs”) registered with the Commission and subject to the Commission’s rules regarding margin requirements for uncleared swaps. 1 For the reasons discussed below, ISDA requests a position of no-action for failure of an SD to comply with the Commission’s uncleared swap margin requirements with respect to certain amendments to Legacy Swaps. For purposes of this letter, “Legacy Swap” means a swap executed prior to the applicable compliance date prescribed in Commission regulation 23.161. Where a swap is executed after the compliance date for variation margin (i.e., March 1, 2017) but before the applicable compliance date for initial margin (see infra for a description of initial margin compliance dates), the swap is a Legacy Swap for the initial margin requirements only.
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Source: Commodity Futures Trading Commission — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works
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