The US Commodity Futures Trading Commission approves UMR delay
02 June 2020 Washington D.C.
Image: MarkVanScyoc/Shutterstock.com
The US Commodity Futures Trading Commission (CFTC) has granted an extension of the compliance schedule for initial margin requirements for uncleared swaps in response to operational challenges caused by the COVID-19 pandemic.
The reprieve was accepted after a vote on the interim final rule (IFR) produced a unanimous ruling in favour of delaying the 1 September implementation date by 12 months.
In the government agency’s meeting, held last week, the commission also unanimously approved a proposed rule which provides an exemption from registration as a commodity pool operator (CPO) for certain foreign persons.
The decision brings the commission in line with the Basel Committee on Banking Supervision and the International Organization of Securities Commissions’ (BCBS/IOSCO), which revised its advised implementation timeline in early April.
BCBS/IOSCO acquiesced to industry bodies’ lobbying efforts in late March which came in response to the worldwide market disruption brought on by the novel coronavirus pandemic.
The International Swaps and Derivatives Association (ISDA)
wrote to BCBS/IOSCO on behalf of its members and those of 21 other associations to request the implementation timeline of the initial margin rules of the Uncleared Margin Rules (UMR) be reviewed.
Speaking when the BCBS/IOSCO granted to reprieve in April, ISDA’s CEO Scott O’Malia said: “We greatly appreciate the decision by the BCBS/IOSCO to defer implementation of phases five and six of the initial margin requirements.
“This will enable the hundreds of buy- and sell-side firms that would have come into scope to focus their resources on ensuring business continuity, managing risk and supporting their customers.”
The CTFC is now accepting comments on the IFR for 60 days after the date of publication in the Federal Register (28 May).
The reprieve was accepted after a vote on the interim final rule (IFR) produced a unanimous ruling in favour of delaying the 1 September implementation date by 12 months.
In the government agency’s meeting, held last week, the commission also unanimously approved a proposed rule which provides an exemption from registration as a commodity pool operator (CPO) for certain foreign persons.
The decision brings the commission in line with the Basel Committee on Banking Supervision and the International Organization of Securities Commissions’ (BCBS/IOSCO), which revised its advised implementation timeline in early April.
BCBS/IOSCO acquiesced to industry bodies’ lobbying efforts in late March which came in response to the worldwide market disruption brought on by the novel coronavirus pandemic.
The International Swaps and Derivatives Association (ISDA)
wrote to BCBS/IOSCO on behalf of its members and those of 21 other associations to request the implementation timeline of the initial margin rules of the Uncleared Margin Rules (UMR) be reviewed.
Speaking when the BCBS/IOSCO granted to reprieve in April, ISDA’s CEO Scott O’Malia said: “We greatly appreciate the decision by the BCBS/IOSCO to defer implementation of phases five and six of the initial margin requirements.
“This will enable the hundreds of buy- and sell-side firms that would have come into scope to focus their resources on ensuring business continuity, managing risk and supporting their customers.”
The CTFC is now accepting comments on the IFR for 60 days after the date of publication in the Federal Register (28 May).
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