RegAlert2021-06-22 | CFTC Staff Letter 21-14Added · Updated
CFTC Staff Letter 21-14: Advisory on Using Margin Models for Minimum Capital Requirements
Registered swap dealers and futures commission merchant/swap dealers may use a risk-based margin model to compute the uncleared swap margin amount for determining minimum regulatory capital requirements without obtaining prior approval from the Commission or the National Futures Association. The model must comply with the standards established in regulation 23.154(b)(2) and be part of the firm's risk management program, but it does not need to be the Standardized Initial Margin Model or the same model used for exchanging initial margin with counterparties. This clarification applies to the calculation of capital under regulations 1.17 and 23.101, distinguishing these capital computations from the separate approval requirements for models used in actual margin exchanges.
CFTC published 6 documents in the last 30 days — get each new one by email the day it lands.
CFTC LETTER NO. 21-14 ADVISORIES JUNE 22, 2021
Market Participants
Division
Amanda L. Olear
Acting Director
To: Futures Commission Merchants and Swap Dealers Subject: Market Participants Division Advisory on the use of Margin Models to Calculate the Uncleared Swap Margin Amount for Purposes of Determining Minimum Capital Requirements The Market Participants Division (“Division”) of the Commodity Futures Trading Commission (“Commission” or “CFTC”) is issuing this advisory to clarify that a registered swap dealer (“SD”) may use a model to compute the initial margin on its uncleared swap positions for purpose of determining its minimum regulatory capital requirement under regulations 1.17 and 23.101, as applicable, without obtaining the approval of the Commission or the National Futures Association (“NFA”) 1 The SD’s model must comply with the standards established by the Commission for margin models in regulation 23.154(b)(2) as discussed below.
I. Regulatory Background
Section 4s(e) of the Commodity Exchange Act (“Act”) requires the Commission to adopt
rules imposing minimum capital requirements and uncleared swap margin requirements on all SDs that are not subject to a prudential regulator. 2 The Commission adopted final initial and
Read the rest free, and get an email when CFTC publishes again
Lineage: In force
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
More like this from CFTC
CFTC published 6 documents in the last 30 days. We email you each new one the day it's published.