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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.