New Margin Rules for Swaps in 2013

CFTC Chairman Gary Gensler said on Monday that new rules mandating the margin needed to back uncleared swap trades will be announced early next year. The announcement comes only a day after a U.S. District Court struck down the CFTC’s rule on position limits.

“I would anticipate that the CFTC, in consultation with Europe, would take up the final margin rules toward the beginning of next year with the benefit of this international work,” Gensler said. Gensler’s remarks hint at a willingness to avoid the extraterritoriality disputes that have undergirded recent regulatory moves.

The margin rules are a mandate of Dodd-Frank financial reform and a consensus result of two G-20 summits.

Debate over swaps margins intensified in recent months with the publication of a new study on swaps by IOSCO and comments from the Basel Committee. Gensler’s statement suggests that the CFTC has taken the comment period to heart.

“We are doing so through the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) whose consultative paper on margin closed just last week,” Gensler said.


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