On October 31, 2014, the CFTC issued an interpretation that provides guidance on certain provisions of CFTC regulations 23.701 and 23.704, which impose certain notification and reporting requirements on swap dealers (“SDs”) and major swap participants (“MSPs”) for margin posted by their counterparties in uncleared swap transactions. The interpretation clarifies that: (i) an SD or MSP must provide annual notification to each counterparty of its right to elect to require segregation of initial margin, each time the SD or MSP enters into a new uncleared swap transaction; (ii) the annual notification and quarterly reporting requirements set forth in Regulations 23.701 and 23.704 are not applicable if no initial margin is required to be posted by a counterparty or collected by an SD or MSP; and (iii) under certain conditions an SD or MSP is not prohibited from relying on negative consent in complying with its obligations to obtain from its counterparty: (a) confirmation of the counterparty’s receipt of the annual notice provided by the SD or MSP under Regulation 23.701, and (b) the counterparty’s election to require or not require segregation.

CFTC Staff Letter 14-131 is available at: http://www.cftc.gov/ucm/groups/public/@lrlettergeneral/documents/letter/14- 132.pdf.