On June 29, 2015, the US Commodity Futures Trading Commission voted unanimously to propose a rule that would apply the CFTC’s margin requirements for uncleared swaps under the framework of cross-border transactions. The proposed rule would apply to CFTC-registered swap dealers and major swap participants (recognized collectively as “covered swap entities”) that are not subject to the margin requirements of other prudential regulators such as the Federal Reserve Board, OCC or the FDIC. Under the proposed rule, covered swap entities would be required to comply with the CFTC’s margin rules for all uncleared swaps in cross-border transactions, with a limited exclusion. In addition, the proposed rule would allow for substituted compliance, which permits covered swap entities to comply with comparable margin requirements in a foreign jurisdiction as an alternative means of complying with the CFTC’s margin rules for uncleared swaps. The comment period ends 60 days after the publication in the Federal Register.
The press release, proposed rule and factsheet are available at: http://www.cftc.gov/PressRoom/PressReleases/pr7192-15; http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/federalregister062915.pdf; and http://www.cftc.gov/ucm/groups/public/@newsroom/documents/file/crossborder_factsheet062915.pdf.