NFA Now Reviewing Risk-Based Initial Margin Models

CW
Cadwalader, Wickersham & Taft LLP

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Cadwalader, established in 1792, serves a diverse client base, including many of the world's leading financial institutions, funds and corporations. With offices in the United States and Europe, Cadwalader offers legal representation in antitrust, banking, corporate finance, corporate governance, executive compensation, financial restructuring, intellectual property, litigation, mergers and acquisitions, private equity, private wealth, real estate, regulation, securitization, structured finance, tax and white collar defense.
The National Futures Association ("NFA") is now accepting for review risk-based initial margin models for uncleared swaps.
United States Finance and Banking

The National Futures Association ("NFA") is now accepting for review risk-based initial margin models for uncleared swaps. The CFTC's final rule on margin requirements (the "CFTC margin rules") allows swap dealers that are subject to the CFTC margin rules (i.e., not the prudential regulators' rules) to choose between using a standardized grid-based calculation for initial margin or an internal risk-based initial margin model approved by the CFTC or NFA. The NFA announcement offers information to covered swap entities on the process of submitting margin model documentation to the CFTC.

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