.CFTC Commissioner Rostin Behnam described recent developments related to LIBOR, margin and swap execution facility ("SEF") reform.
At the ISDA 24th Annual General Meeting, Mr. Behnam reported that (i) ISDA is updating its definitions to incorporate new benchmark fallbacks and is intending to publish a protocol to permit market participants to include fallbacks in legacy contracts, (ii) the Alternative Reference Rates Committee met to identify an alternative risk-free reference, and (iii) the CFTC Market Risk Advisory Committee formed an Interest Rate Benchmark Reform Subcommittee to focus on the transition from LIBOR to the Secured Overnight Financing Rate.
On derivatives margin, Mr. Behnam reported that a group of regulatory authorities provided information to BCBS-IOSCO on the implementation of initial margin requirements for the 2020 phase-in. Mr. Behnam noted the BCBS-IOSCO statement on the implementation of derivatives margin requirements, and said that the CFTC is "currently considering" that statement.
Regarding progress on cross-border regulation, Mr. Behnam referenced CFTC Chair J. Christopher Giancarlo's white paper on cross-border swaps regulation from October 2018, and said that he agrees with Mr. Giancarlo that it is time to "take stock" of global reforms and work toward more "recognition of and deference to each other's regulatory adoption and implementation of the G-20 reforms." However, Mr. Behnam also indicated that he supported more limited changes to the SEF regime than were proposed in the white paper.
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