MFA: Update on SEC Interim Relief for CDS Customer Portfolio Margining
The MFA posted on its blog that the SEC staff and FINRA are expected to announce a new interim approach to customer margin for cleared CDS transactions. According to the MFA, this change will likely occur in two steps:
- "Effective as of June 10, 2013, registered broker-dealers and futures commission merchants ('BD/FCMs') shall impose initial margin as calculated by the ICE Clear Credit ('ICC') model and/or CFTC requirements, and the BD/FCMs shall impose additional margin in accordance with each firm's own risk management procedures. Under this approach, each BD/FCM must collect at a minimum what the ICC model and CFTC rules require. The SEC staff and FINRA intend for this temporary reduction to last for up to six months."
- "During the six-month period, the SEC and FINRA will work with each BD/FCM to review and approve individual BD/FCM margin models."
Click here to learn more (links externally to MFA website).See prior story: MFA Coalition Joint Letter on CDS Customer Portfolio Margining