On October 25, the Financial Industry Regulatory Authority (FINRA) filed a rule change (SR-FINRA-2019-026) with the Securities and Exchange Commission that postpones for another full year the implementation of mandatory margin for Covered Agency Transactions under FINRA Rule 4210. The scheduled implementation date will now be March 25, 2021 instead of March 25, 2020.
This is the fourth postponement of the effective date of these rules, which were adopted in 2015 and establish margin requirements for (1) To Be Announced transactions, inclusive of adjustable rate mortgage transactions; (2) Specified Pool Transactions; and (3) transactions in Collateralized Mortgage Obligations, issued in conformity with a program of an agency or Government-Sponsored Enterprise, with forward settlement dates (collectively, “Covered Agency Transactions”). The explanation for this postponement is the same as for the last one: “FINRA is considering, in consultation with industry participants and other regulators, potential amendments to the requirements of SR-FINRA-2015-036. FINRA believes that this is appropriate in the interest of avoiding unnecessary disruption to the Covered Agency Transaction market. As such, FINRA is proposing to extend the March 25, 2020 implementation date by an additional year, to March 25, 2021 while FINRA considers potential amendments.”
The text of the rule change is available here.