covered swap entities

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On March 31, the National Futures Association (NFA) issued Notice I-21-14 advising member firms that are registered with the Commodity Futures Trading Commission as swap dealers (SDs), that NFA rules adopting minimum capital and financial reporting requirements will become effective October 6.
Continue Reading NFA Issues Notice Regarding Effective Date of NFA’s Swap Dealer Capital Requirements

On May 17, the Commodity Futures Trading Commission released a proposed rule to amend the CFTC’s margin requirements for uncleared swaps for swap dealers and major swap participants. The proposed rule amendments are intended to make the same changes to the CFTC margin requirements that federal banking regulators recently proposed for the margin rules for swap dealers that are subject to prudential regulation (for more information, please see the Corporate & Financial Weekly Digest edition of February 12, 2018). The proposed rule will ensure that master netting agreements of firms subject to the CFTC margin requirements are not excluded from the definition of “eligible master netting agreement” merely because they comply with recent regulatory changes to the treatment of qualified financial contracts executed with banks (“QFC Rules”).
Continue Reading CFTC Issues Proposed Rule to Amend Margin Requirements

On August 23, the Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight and Division of Clearing and Risk (the Divisions) issued a response to the International Swaps and Derivatives Association (ISDA), which had requested the CFTC to clarify whether a covered swap entity (CSE) is permitted to include security-based swaps within the same product set as swaps for the purpose of calculating initial margin for uncleared swaps.
Continue Reading CFTC Issues No-Action Letter Regarding Use of Security-Based Swaps in Initial Margin Calculations for Uncleared Swaps

On April 14, National Futures Association (NFA) issued Notice I-16-03, which provides further details regarding NFA’s review and approval process for margin models used by swap dealers and major swap participants that are not subject to the oversight of a prudential regulator (Covered Swap Entities). To comply with Commodity Futures Trading Commission margin rules, Covered Swap Entities must first choose between a standardized grid-based calculation for initial margin or an internal risk-based initial margin model.
Continue Reading NFA Issues Notice Regarding the Approval Process for New Margin Models Used by Covered Swap Entities