The CFTC proposed changing the compliance date for "Phase Six" of initial margin requirements from September 1, 2021 to September 1, 2022. The proposal follows on an interim final rule in which the CFTC delayed "Phase Five" from September 1, 2020, to September 1, 2021.
The added delay would affect entities with $8 billion to $50 billion in derivatives notional over the relevant measuring period. The CFTC indicated that the proposed delay is intended to align with a recent delay adopted as part of a BCBS/IOSCO revised framework for uncleared derivatives margin.
Comments on the proposal must be submitted within 60 days of publication in the Federal Register.
While the vote on the proposal was unanimous, two commissioners issued written statements questioning the need for the delay. Commissioner Dan M. Berkovitz said he is "not presupposing that the full extension is necessary," and noted that both small and large portfolio entities "will have had plenty of time to spread the negotiation and implementation process out over [these] many years." Commissioner Rostin Benham questioned as "counterintuitive" the idea of delaying IM requirements "as a means to provide temporary, targeted relief to address increased market volatility." Commissioner Benham also stated that he would not support any further relief without "truly compelling facts and lockstep agreement with the prudential regulators."
The CFTC voted to adopt an interim final rule to delay the implementation of "Phase Five" initial margin requirements for uncleared derivatives from September 1, 2020 to September 1, 2021.
A final rule amendment to extend the compliance phase-in schedule for initial margin requirements for uncleared swaps was published in the Federal Register.
The Basel Committee on Bank Supervision and IOSCO deferred the final implementation phases of initial margin requirements for uncleared derivatives.
The CFTC Global Markets Advisory Committee considered subcommittee recommendations for improving the scoping and implementation of initial margin requirements for uncleared swaps.
The CFTC voted to extend the compliance phase-in schedule for initial margin requirements for uncleared swaps.