Commodity Futures Trading Commission July 10, 2020 – Federal Register Recent Federal Regulation Documents

The Commodity Futures Trading Commission (``Commission'' or ``CFTC'') is seeking comment on a proposed amendment to the margin requirements for uncleared swaps for swap dealers (``SD'') and major swap participants (``MSP'') for which there is no prudential regulator (the ``CFTC Margin Rule''). As adopted in January 2016, the CFTC Margin Rule, which mandates the collection and posting of variation margin and initial margin (``IM''), was to take effect under a phased compliance schedule extending from September 1, 2016, to September 1, 2020. On April 9, 2020, the Commission published in the Federal Register a final rule extending the September 1, 2020 compliance date by one year to September 1, 2021, for a portion of what was to be the final phase consisting of entities with smaller average daily aggregate notional amounts of swaps and certain other financial products (the ``Smaller Portfolio Group'') to reduce the potential market disruption that could result from a large number of entities coming into the scope of compliance on September 1, 2020 (``April 2020 Final Rule''). Subsequently, on May 28, 2020, to mitigate the operational challenges faced by certain entities subject to the CFTC Margin Rule as a result of the coronavirus disease 2019 (``COVID-19'') pandemic, the Commission adopted an interim final rule (the ``IFR'') extending the September 1, 2020 compliance date for certain entities by one year (``IFR Extension Group'') to September 1, 2021. This rulemaking proposal (``Proposal'') would further delay the compliance date for the Smaller Portfolio Group from September 1, 2021, to September 1, 2022, to avoid market disruption due to a large number of entities being required to comply by September 1, 2021, under the revised compliance schedule.