CFTC Grants Relief Concerning Application Of Minimum Transfer Amounts Under Uncleared Margin Rules

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") granted time-limited no-action relief relating to the application of minimum transfer amounts ("MTAs") under uncleared margin requirements.

CFTC margin regulations permit the use of "minimum transfer amounts," under which swap dealers need not post or collect margin until the required amount exceeds the minimum transfer amount, which may not be higher than $500,000. Rules 23.152 and 23.153 provide that, for purposes of the MTA, amounts are considered collectively for initial margin and variation margin. In response to a request from ISDA, DSIO provided time-limited relief to permit separate MTAs for initial margin ("IM") and variation margin ("VM"), so long as the combined MTA does not exceed $500,000.