Clearing & Collateral

WHAT REVISIONS DID THE CFTC PROPOSE & WHY? The CFTC proposed revisions to swaps processing and reporting (Section 21 of the CEA (Commodity Exchange Act). The goals of Dodd-Frank are to make the swaps market transparent, liquid & trackable.  The CFTC proposes Identifiers for every swap. ...

Making Sense of Derivatives Reform These Derivative Cheat Sheets will help make sense of derivatives reform. [caption id="attachment_6272" align="aligncenter" width="295"] Click on the image to view matrices.[/caption] The attached PDF includes 3 resources: Page 1 - Matrix of the differences between Cleared and Uncleared Swaps  (Source: MHDS LLC) Page 2...

Proposed Margin Rules Last month, US Banking Regulators presented a new proposal for the collection, calculation, and segregation of margin for bilateral derivatives. The new US proposals are quite different from their original 2011 proposal, in light of the BCBS/IOSCO issuance of their 2013 final policy framework on...

The exact impact of increased collateral requirements as the derivatives market shifts from bilateral to cleared contracts is unknown but widely estimated. Moody’s has made a guess of $700 billion to $1.2 trillion, which doesn’t sound too outlandish. Initial Margin Requirements for Swaps Initial margin (expected to be...