CFTC Issues Final Rules Regarding The Cross-Border Application Of Its Uncleared Swaps Margin Requirements

On May 24, 2016, the Commodity Futures Trading Commission ("CFTC") in a much anticipated action approved the issuance of final rules ("Final Rules") regarding the cross-border application of its uncleared swaps margin requirements that it adopted on December 16, 2015. The Final Rules are closely aligned with the cross-border rules for uncleared swaps margin that the Prudential Regulators¹ adopted in October of 2015 for swap dealers and major swap participants subject to their supervision.² The CFTC's Final Rules, which were published in the Federal Register on May 31, 2016, are scheduled to become effective on August 1, 2016.³

I. BACKGROUND

In December of 2015, the CFTC adopted final rules ("December 2015 Final Margin Rules") regarding margin requirements for uncleared swaps for swap dealers and major swap participants that do not have a Prudential Regulator ("Covered Swap Entities" or "CSEs"). The rules that became the December 2015 Final Margin Rules had been