Global Correspondence
GFMA Submits Comments to US Prudential Regulators on Margin and Capital Requirements for Covered Swap Entities
The Global Foreign Exchange Division (GFXD) of GFMA provides comments to the U.S. prudential regulators on the proposed margin and capital requirements for covered swaps entities, Board Docket No. R-1415, OCC-2011-0008, FDIC RIN 3064-AD79, FHFA RIN 2590-AA45, FCA RIN 3052-AC69. The Board of Governors of the Federal Reserve, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Office of the Comptroller of the Currency, and the Farm Credit Administration (collectively, the Agencies) have reopened the comment period on the Proposed Margin Rule in light of the consultative document on margin requirements for non-centrally-cleared derivatives (Consultative Document) published for comment by the Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (IOSCO). Since GFMA believes the Dodd-Frank Act achieves the correct policy outcome with respect to foreign exchange swaps and foreign exchange forwards, the group asserts that extending a margin regime for uncleared swaps to these two foreign exchange products as contemplated by the Consultative Document is not appropriate, and is not consistent with the established and proven strategy of central banks, in consultation with supervisors, for addressing systemic risk in this market.
