Protecting Customer Margin for Cleared and Uncleared Swaps

Originally published November 30, 2010

The Commodity Futures Trading Commission (CFTC) continues to issue regulations implementing the OTC derivatives provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The CFTC recently released an advanced notice of proposed rulemaking and a proposed rule that together address safeguarding customer margin for swaps, both cleared and uncleared.

Clients active in OTC derivatives markets will want to follow these rules closely, because they will directly affect the protection of their margin for cleared and uncleared derivatives, as well as the costs that will be incurred entering into derivatives under the new legislation.