Sat, Aug 27, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

CFTC adopts new rules on cleared swaps collateral segregation

Friday, March 09, 2012

Bailey McCann, Opalesque New York - The Commodity Futures Trading Commission (CFTC) has adopted a new slate of final rules concerning collateral segregation for cleared swaps. Futures commission merchants (FCMs) and derivatives clearing organizations (DCOs) will now be required to segregate collateral posted by customers on cleared swaps. The rule changes are part of the regulator's efforts to comply with the requirements set forth in the Dodd-Frank Act.

The new rules will go into effect on April 9, 2012 but market participants will have until November 8, 2012 to be fully compliant.

Under the terms of the new rules, FCMs and DCOs must segregate cleared swap customers collateral on their books and records and cannot comingle customer collateral with their own funds. Customer collateral may only be comingled with other customer funds. The new rules also restrict derivatives clearing organizations from using non-defaulting customer collateral to cover the obligations of defaulting customers.

The changes are designed to reduce "fellow-customer risk," but will have an impact on the cost of entering into cleared swap transactions. Futures commission merchants and derivatives clearing organizations will likely bear the biggest brunt in terms of cost to implement these new rules as they require significant operational changes for both groups.

According to a ......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new