The CFTC adopted amendments to its uncleared swap margin requirements so as to comply with the stay-related rules applicable to "qualified financial contracts" ("QFCs").
The amendments clarify that (i) swap agreements are not excluded from the CFTC Margin Rule definition of "eligible master netting agreement" based on their compliance with the QFC rules and (ii) any legacy uncleared swap that is out of scope for the CFTC swap margin rules will not become in-scope as a result of amendments made to comply with the QFC rules. The changes are consistent with those made by the U.S. "prudential regulators" (as covered here).
The amendments will become effective 30 days after publication in the Federal Register.
Commentary / Nihal Patel
As with the prudential regulators' version of these changes, the most notable thing about the CFTC action is what it did not do; it did not make any changes beyond those directly related to the QFC rules. CFTC Chair Giancarlo's statement on the matter is notable. He essentially indicated to the market that, while the CFTC did not address other issues in this rulemaking, it will entertain other requests for relief relating to legacy swaps.
Commentary / Steven Lofchie
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