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SIFMA today issued the following statement from President and CEO Kenneth E. Bentsen, Jr. on the NPR issued by the FDIC on swap margin requirements:
“SIFMA appreciates the continuing efforts by regulators to review rules, regulations and practices to identify those areas which can be simplified, harmonized and streamlined to eliminate unnecessary inconsistencies and overlap. SIFMA believes exempting inter-affiliate swaps from the initial margin requirement is a beneficial step, as it unlocks liquidity for investments which contribute to economic growth. It is important to note that these swaps would remain subject to variation margin and central risk management.
“Today’s action eliminates what was an unnecessary redundancy inconsistent with other regulators in the U.S., notably the CFTC and SEC, and abroad. Further, aligning the uncleared margin phase in with BCBS IOSCO’s amended timeline and clarifying the requirements which apply to counterparties as they come into scope will promote more harmonized global implementation.
“In a similar vein, as the market moves to new reference rates, it is crucial to remove roadblocks to the transition of legacy contracts and to strive for consistency across geographical regions, product segments and market participants to avoid fragmentation in global markets.
“We look forward to reviewing the proposal issued today and offering our views during the comment period.”
