Wed, Nov 25, 2015
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. Other Voices: Hedge fund marketing and the selling cycle[more]

    By Bruce Frumerman. How long is the selling cycle now? That’s a question my financial communications and sales marketing consulting firm has been asked on a regular basis by hedge fund firm owners and sales people, ever since we opened the doors to our firm in 1987 pre-crash. Wa

  2. Investing - BlackRock targets ETF investors with flexible currency hedging, Nelson Peltz bets on General Electric Company and Mondelez International, Apple plummets to 4th place among hedge holdings, from No. 1, Top Q3 equity purchases and sales of top 50 hedge funds[more]

    BlackRock targets ETF investors with flexible currency hedging From BlackRock Inc., the world’s largest asset manager, is changing course on exchange-traded funds that protect against currency volatility. After stressing the easy switch between hedged and unhedged ET

  3. Chicago-based Achievement A. M. is shutting down hedge fund following losses[more]

    Komfie Manalo, Opalesque Asia for New Managers: Achievement Asset Management, a Chicago-based hedge fund firm, has announced it is closing down its hedge fund operation following losses on energy market bets this ye

  4. Lyxor Hedge Fund Index up 0.1% (+0.4% YTD) as global macro and CTAs outperform[more]

    Komfie Manalo, Opalesque Asia for New Managers: Global macro and CTAs outperformed the hedge fund space and delivered positive returns last week amidst difficult market conditions, with the Lyxor Hedge Fund Index up

  5. BlackRock is shutting down its Global Ascent macro fund[more]

    Komfie Manalo, Opalesque Asia: BlackRock, the world’s largest asset manager, has announced plans to shut down a macro fund, Global Ascent Fund, because of "headwinds facing the industry". The hedge fund, which makes bets on stock, bond and currency markets, will return money to investors. Ac