On December 8, the Commodity Futures Trading Commission (CFTC) unanimously approved two final rules related to margin requirements for uncleared swaps for swap dealers (SD) and major swap participants (MSP).

The CFTC approved a final rule that amends the margin requirements for uncleared swaps for SDs and MSPs for which there is no prudential regulator (CFTC Margin Rule). The final rule permits the application of a minimum transfer amount (MTA) up to $50,000 for each separately managed account of a legal entity that is a counterparty to an SD or MSP in an uncleared swap transaction and allows the application of separate MTAs for initial margin and variation margin.

Additionally, the CFTC approved a final rule amending the CFTC Margin Rule’s definition of material swaps exposure (MSE) by revising the method for calculating the average aggregate notional amount of uncleared swaps and other financial products (AANA) for determining MSE. Specifically, the final rule changes the period for calculating AANA from June, July and August of the prior year, to March, April and May of the current year, requiring the averaging of month-end AANA instead of daily AANA over the three-month calculation period. The final rule also establishes September 1 of each year as the date for determining MSE after the end of the phased compliance schedule for initial margin.

Each rule is effective 30 days after publication in the Federal Register.

The final rules are available here.