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Collateral Damage or Marginal Benefit? The CFTC and Prudential Regulators’ Approaches to Margin for Uncleared Swaps  


Author:  Julian E. Hammar.; James E. Schwartz.; Michael R. Sorrell, Jr..


Source: Volume 28, Number 04, March/April 2015 , pp.29-45(17)




Journal of Taxation and Regulation of Financial Institutions

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Abstract: 

This article reviews the uncleared swaps margin proposed rules of the Prudential Regulators and the Commodity Futures Trading Commission, noting some of the few material differences between them. It also compares and contrasts the Proposals to the international framework for margin requirements on non-centrally cleared derivatives released by the Basel Committee on Banking Supervision and the Board of the International Organization of Securities Commissions and the proposal issued by the European Union, where more significant differences exist, and raises areas of potential concern to participants in the swaps marketplace.

Keywords: covered swap entity; margin for uncleared swaps; material swaps exposure; financial end-users; eligible master netting agreements; cross-border application of margin

Affiliations:  1: Morrison & Foerster, LLP; 2: Morrison & Foerster, LLP; 3: Morrison & Foerster, LLP.

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