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2012-16983

  • Federal Register, Volume 77 Issue 134 (Thursday, July 12, 2012)[Federal Register Volume 77, Number 134 (Thursday, July 12, 2012)]

    [Proposed Rules]

    [Pages 41109-41110]

    From the Federal Register Online via the Government Printing Office [www.gpo.gov]

    [FR Doc No: 2012-16983]

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    COMMODITY FUTURES TRADING COMMISSION

    17 CFR Part 23

    Margin Requirements for Uncleared Swaps for Swap Dealers and

    Major Swap Participants

    AGENCY: Commodity Futures Trading Commission.

    ACTION: Extension of comment period.

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    SUMMARY: On April 28, 2011, the Commodity Futures Trading Commission

    (``Commission'' or ``CFTC'') published in the Federal Register a notice

    of proposed rulemaking that would establish initial and variation

    margin requirements on uncleared swaps for swap dealers (``SDs'') and

    major swap participants (``MSPs'').\1\ In October 2011, the Basel

    Commission on Banking Supervision (``BCBS'') and the International

    Organization of Securities Commissions (``IOSCO'') established a

    Working Group on Margin Requirements (``WGMR'') to develop harmonized

    international standards for uncleared swaps. BCBS and IOSCO recently

    published a consultative paper prepared by the WGMR that outlines

    possible margin requirements for non-centrally cleared derivatives

    (``consultative paper'').\2\ The Commission is extending the comment

    period for its proposed margin rules for uncleared swaps for swap

    dealers and major swap participants in order to give interested parties

    the opportunity to comment on the consultative paper and the CFTC's

    proposed rules concurrently.

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    \1\ See 76 FR 23732.

    \2\ The WGMR is comprised of representatives from over 25

    domestic and international regulatory authorities, including the

    CFTC.

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    DATES: Comments must be submitted on or before September 14, 2012.

    ADDRESSES: You may submit comments, identified by RIN 3038-AC97, and

    Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap

    Participants by any of the following methods:

    The Agency's Web site, at http://comments.cftc.gov/.

    Follow the instructions for submitting comments through the web site.

    Mail: David A. Stawick, Secretary of the Commission,

    Commodity Futures Trading Commission, Three Lafayette Centre, 1155 21st

    Street NW., Washington, DC 20581.

    Hand Delivery/Courier: Same as mail above.

    Federal eRulemaking Portal: http://www.regulations.gov.

    Please submit your comments using only one method.

    [[Page 41110]]

    All comments must be submitted in English, or if not, accompanied

    by an English translation. Comments will be posted as received to

    www.cftc.gov. If you wish the Commission to consider information that

    you believe is exempt from disclosure under the Freedom of Information

    Act, a petition for confidential treatment of the exempt information

    may be submitted according to the procedures established in Sec. 145.9

    of the Commission's regulations.\3\ The Commission reserves the right,

    but shall have no obligation, to review, pre-screen, filter, redact,

    refuse or remove any or all of your submission from http://www.cftc.gov

    that it may deem to be inappropriate for publication, such as obscene

    language. All submissions that have been redacted or removed that

    contain comments on the merits of the rulemaking will be retained in

    the public comment file and will be considered as required under the

    Administrative Procedure Act and other applicable laws, and may be

    accessible under the Freedom of Information Act.

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    \3\ See 17 CFR 145.9.

    FOR FURTHER INFORMATION CONTACT: John C. Lawton, Deputy Director,

    jlawton@cftc.gov, Division of Clearing and Risk, or Jason A. Shafer,

    Attorney Advisor, Division of Swap Dealer and Intermediary Oversight,

    jshafer@cftc.gov, Commodity Futures Trading Commission, Three Lafayette

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    Centre, 1155 21st Street NW., Washington, DC 20581.

    SUPPLEMENTARY INFORMATION: On April 28, 2011, the Commission published

    in the Federal Register a notice of proposed rulemaking that would

    establish initial and variation margin requirements on uncleared swaps

    for SDs and MSPs.\4\ In October 2011, BCBS and IOSCO established the

    WGMR to develop harmonized international standards for uncleared swaps.

    BCBS and IOSCO recently published a consultative paper prepared by the

    WGMR that outlines possible margin requirements for non-centrally

    cleared derivatives.\5\ The consultative paper addresses a number of

    topics, including: (i) The instruments that would be subject to margin

    requirements; (ii) the market participants to be subject to margin

    requirements; (iii) initial margin and variation margin methodology;

    (iv) eligible collateral; (v) treatment of provided margin; (vi)

    treatment of inter-affiliate transactions; and vii) treatment of cross-

    border transactions.\6\

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    \4\ See 76 FR 23732.

    \5\ The WGMR is comprised of representatives from over 25

    domestic and international regulatory authorities, including the

    CFTC.

    \6\ The consultative paper is available on the Bank for

    International Settlements (``BIS'') Web site (www.bis.org), the

    IOSCO Web site (www.iosco.org) and the CFTC Web site (www.cftc.gov).

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    BCBS and IOSCO are requesting comment on the initial proposals set

    forth in the consultative paper. After reviewing and evaluating any

    comments received, the WGMR will issue final policy recommendations for

    margin requirements for non-centrally cleared derivatives.\7\ As part

    of the international effort to implement consistent global standards

    for margin requirements for non-centrally cleared derivatives, the CFTC

    will consider the final policy recommendations set forth by the WGMR

    when adopting its final rules for margin for uncleared swaps and may

    adapt its final rules to conform with the final policy recommendations

    set forth by BCBS and IOSCO. Accordingly, the Commission believes it is

    appropriate to extend the comment period for its proposed margin

    requirements in order to give interested parties the opportunity to

    comment on the consultative paper and the CFTC's proposed rule

    concurrently.

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    \7\ Concurrently with the comment period for the consultative

    paper, BCBS and IOSCO also will conduct a quantitative impact study

    (``QIS'') to assess the costs and benefits of margin requirements.

    The results of the QIS will be considered along with the comments

    submitted on the consultative paper in formulating a final joint

    proposal on non-centrally cleared derivatives.

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    Therefore, the Commission is extending the comment period until

    September 14, 2012, for all aspects of its proposed margin rules on

    uncleared swaps and specifically requests quantitative data and

    analysis on the comparative costs and benefits of the CFTC's proposed

    rule and the initial proposals set forth in the consultative paper.

    Issued by the Commission, this 5th day of July 2012.

    David Stawick,

    Secretary of the Commission, Commodity Futures Trading Commission.

    Note: The following appendix will not appear in the Code of

    Federal Regulations

    Appendix 1--Statement of Chairman Gary Gensler

    I support the formal reopening of the comment period on the

    CFTC's initial margin proposal so that we can hear further from

    market participants in light of work being done to internationally

    harmonize an approach to margin.

    The CFTC has been working with the Federal Reserve, the other

    U.S. banking regulators, the Securities and Exchange Commission and

    international regulators and policymakers to align margin

    requirements for uncleared swaps. I think it is essential that we

    align these requirements globally, particularly between the major

    market jurisdictions. The international approach to margin

    requirements in the consultative paper (sponsored by the Basel

    Committee on Banking Supervision and the International Organization

    of Securities Commissions) released today is consistent with the

    approach the CFTC laid out in its margin proposal last year. It

    would lower the risk of financial entities, promote clearing and

    help avoid regulatory arbitrage.

    [FR Doc. 2012-16983 Filed 7-11-12; 8:45 am]

    BILLING CODE 6351-01-P

    Last Updated: July 12, 2012



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