CFTC proposes CPO exemption, extends relief for uncleared swaps margin requirements

Commissioners vote unanimously to advance two items related to pandemic-related disruptions

29 May 2020


The U.S. Commodity Futures Trading Commission voted 5-0 to advance two rulemakings at a May 28 meeting held via teleconference. The first item was to propose a registration exemption for commodity pool operators (CPOs) acting on behalf of offshore commodity pools. The second item was an interim final rule extending the compliance schedule for initial margin requirements on uncleared swaps.

Proposed Rule: Amending Regulation 3.10(c)(3) – Providing an Exemption from Registration for Foreign Persons Acting as Commodity Pool Operators on Behalf of Offshore Commodity Pools

The discussion on this proposal centered on the need to accommodate the interconnected nature of global derivative markets but also to protect U.S. markets and customers. The commission noted that the proposed rule is a good example of codifying existing no-action relief to provide certainty for market participants as well as exhibiting deference to the CFTC's international counterparts when appropriate.

Interim Final Rule: Amending Regulation 23.161 – Extending the Compliance Schedule for Initial Margin Requirements for Uncleared Swaps in Response to the COVID-19 Pandemic

The CFTC unanimously adopted the recent recommendation of the Basel Committee and IOSCO to delay the implementation of Phase 5 of margin requirements for uncleared swaps, extending the date by a year to September 2021. Phase 5 will require asset managers and other market participants with more than $50 billion in derivatives notional amounts to meet initial margin requirements for their uncleared derivatives. The commission noted it was not addressing the Phase 6 deadline, which affects firms below that $50 billion threshold, but will continue to monitor the issue and will remain open to delaying that final phase of compliance in a separate rulemaking.

Official statements and documents



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