Global Correspondence
GFMA Submits Comments to US Prudential Regulators and CFTC on Margin Rules for Uncleared Swaps
The Global Foreign Exchange Division (GFXD) of GFMA provided comments to the US prudential authorities and CFTC on (re)proposed margin rules on uncleared swaps.
The GFXD supports the Agencies’ efforts to establish margin requirements which would help ensure the safety and soundness of covered swap entities and would be appropriate for the risk to the financial system associated with non-cleared swaps held by such entities. The GFXD views the proposed margin regime in the U.S. as achieving the international regulatory framework’s goal of promoting global consistency and reducing regulatory arbitrage opportunities with respect to the treatment of physically-settled OTC FX forwards and swaps, specifically that (i) initial margin not apply to these contracts and (ii) variation margin be applied via supervisory guidance or national regulation.
