SIFMA called margin requirements for derivatives users significant to both financial and commercial companies
12 April 2011
SIFMA said that the CFTC’s proposal will have a significant impact on the future operations of the derivatives markets, and on the financial and commercial companies that use these products to hedge their risks.
“Today’s proposal by the CFTC and the prudential regulators will have a significant impact on the future operations of the derivatives markets and on the financial and commercial companies that use these products to hedge their risks. We appreciate the prudential regulators' proposal's reliance on existing capital rules, which we believe are appropriate for swap entities."
“While we are still reviewing both proposals, some troubling differences in approaches are already apparent. Specifically, while the CFTC proposal does not require commercial end users to post margin for uncleared swap transactions, the prudential regulators’ proposal requires swap entities to collect margin from these end users if credit limit exposures are exceeded."
“These and other differences must be addressed before fully implementing new rules, otherwise regulators risk providing little certainty to market participants, and threatening the orderly operations of these markets. We will work with all prudential regulators, the CFTC and the SEC as this process moves forward to ensure these new rules are coordinated and have the least adverse impact on the financial and commercial companies that rely tremendously on these products.”
© SIFMA - Securities Industry and Financial Markets Association
