Seventeen Democrats from the U.S. House of Representatives urged prudential regulators to ease initial margin ("IM") requirements for inter-affiliate swap transactions by harmonizing with the CFTC and other major G20 regulators.
Although certain of the prudential regulators have indicated that they are reviewing the requirement that IM be posted in inter-affiliate transactions, the representatives expressed concern that this would take extensive time when "quick action" is necessary. Among other things, the representatives said that the IM requirements (i) limit economic growth by locking up the large and increasing amount of collateral from inter-affiliate swap transactions, and (ii) disincentivize firms from implementing "good internal risk management."
ISDA identified key differences among jurisdictional implementations of margin requirements for non-cleared derivatives that have led to market fragmentation.
Several trade associations asked U.S. prudential regulators to remove the requirement that swap dealers collect initial margin from their affiliates.
The CFTC adopted an amended substituted compliance determination relating to Japanese swaps margin requirements.
The House Subcommittee on Capital Markets, Securities and Investments reviewed several legislative proposals relevant to derivatives end-users.
The CFTC Divisions of Market Oversight and of Clearing and Risk issued no-action letters extending and modifying previously granted relief from the swap clearing and trade execution requirements for certain affiliated counterparties.