National Futures Association (NFA) has issued a notice reminding its swap dealer (SD) and major swap participant (MSP) members of their obligations under the new uncleared swap margin requirements adopted by the Commodity Futures Trading Commission. Under the CFTC’s new margin rules, SDs and MSPs that are not subject to oversight by a prudential regulator must calculate their initial margin using either a standardized model set forth by the CFTC or an internal risk-based model that has been approved by the CFTC or NFA. More information related to the margin requirements is available in the Corporate & Financial Weekly Digest edition of December 18, 2015.

The CFTC’s margin rules will be implemented in phases starting on September 1. Each SD and MSP that seeks NFA approval for its internal risk-based model must submit supporting documentation that describes the quantitative standards for the model and the qualitative standards for the firm. NFA will issue a notice to members shortly to provide further details on the documentation submission process.

More information is available here.