Margin requirements for uncleared swaps

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the US banking regulators, the Commodity Futures Trading Commission and the Securities and Exchange Commission must adopt regulations governing the collection of margin for uncleared swaps. These regulations...

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Bibliographic Details
Published in:The Investment Lawyer 2016-02, Vol.23 (2), p.10
Main Author: Patent, Lawrence B
Format: Article
Language:English
Subjects:
Capital requirements
Collateral
Default
Derivatives
End users
Foreign banks
Information technology services industry
Interest rate swaps
Laws, regulations and rules
Margin requirements
Over the counter trading
Regulation of financial institutions
SEC regulations
Securities industry
Swap arrangements
Swaps (Finance)
Treasuries
Wall Street Reform & Consumer Protection Act 2010-US
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Summary:Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the US banking regulators, the Commodity Futures Trading Commission and the Securities and Exchange Commission must adopt regulations governing the collection of margin for uncleared swaps. These regulations will have a broad impact on financial firms participating in the swaps market. This article will focus upon some of the elements of the regulations that may have particular impact upon managers of collective investment vehicles. The original Group of Twenty (G20) meeting that addressed over-the-counter derivatives, which was held in Pittsburgh in 2009, adopted a reform program that included higher capital requirements for non-centrally cleared derivatives as an element of the response to the crisis, but it was not until a subsequent G20 meeting in Cannes, France in November 2011 that the member nations agreed to add margin requirements for uncleared swaps to the reform program and called upon the Basel Committee on Banking Supervision and the International Organization of Securities Commissions to develop a global framework for these requirements.
ISSN:1075-4512