NFA recently began accepting swap dealers’ risk-based initial margin models for approval in conjunction with CFTC Rules governing margin for uncleared swaps. For initial margin determinations, CFTC Rules permit a swap dealer to choose between a standardized grid-based calculation set forth in the Rules or a margin model approved by the CFTC or NFA. The NFA review process includes a number of steps, which include exploratory discussions, margin model submission, review and assessment, and finally, approval.
Margin models may be submitted online through NFA’s EasyFile system following exploratory discussions and only after NFA has informed the firm it is ready to accept the margin models. Those firms seeking approval by the September 1, 2016 deadline should begin the process as soon as they are able.