CFTC Extends Phase 6 Compliance Date for Margin Requirements; Amends Position Limits Rules
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October 16, 2020 TO: ICI MembersICI Global Members
Derivatives Markets Advisory Committee
ICI Global Trading & Markets Committee
LIBOR Transition Working Group SUBJECTS: Compliance
Derivatives
International/Global
Investment Advisers
Trading and Markets RE: CFTC Extends Phase 6 Compliance Date for Margin Requirements; Amends Position Limits Rules
On October 15, the Commodity Futures Trading Commission (CFTC) unanimously voted in an open meeting to defer Phase 6 compliance with its margin requirements for uncleared swaps for an additional year to September 1, 2022.[1] The CFTC’s deferral is consistent with the current implementation framework set forth by the Basel Committee on Banking Supervision and the Board of the International Organization of Securities Commissions (“BCBS-IOSCO”) and a similar deferral adopted by US prudential regulators earlier this year.[2] The CFTC’s voting draft is available at https://www.cftc.gov/media/5056/votingdraft101520MarginRequirements/download.
CFTC Amendments to Position Limits Rules
At the open meeting, by a 3-2 vote, the CFTC also adopted long-awaited amendments to its regulations on speculative position limits. A summary of the amendments and the CFTC’s voting draft of the amendments are available at https://www.cftc.gov/PressRoom/PressReleases/8287-20.
Nhan Nguyen
Counsel, Securities Regulation
endnotes
[1] We previously joined several other trade associations in submitting a letter to the CFTC expressing support for deferring the Phase 6 compliance date for an additional year. See ICI Memorandum No. 32664 (Aug. 6, 2020), available at https://www.ici.org/my_ici/memorandum/memo32664.
[2] BCBS-IOSCO previously amended its uncleared swaps margin framework to extend the deadline for completing Phase 5 and Phase 6 implementation by one year. See ICI Memorandum No. 32351 (Apr. 3, 2020), available at https://www.ici.org/my_ici/memorandum/memo32351. In June, the US prudential regulators issued an interim final rule to adopt similar Phase 5 and Phase 6 extensions. See ICI Memorandum No. 32559 (June 26, 2020), available at https://www.ici.org/libor/ici_resources/memos/memo32559. The CFTC previously issued a separate interim final rule deferring Phase 5 compliance for an additional year until September 1, 2021. See Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants; Proposed Rule (July 10, 2020), 85 FR 41346, available at https://www.cftc.gov/sites/default/files/2020/07/2020-12033a.pdf.