Time-Limited No-Action Relief Issued for Variation Margin Rule

The CFTC issued limited no-action relief yesterday in response to industry requests to push out the date for compliance with the variation margin requirements (CFTC Regulation 23.153), providing swap dealers more time to put the necessary infrastructure in place.  The no-action relief is time limited and only applicable under certain conditions.

As predicted in our December 15, 2016 Regulatory Update, Christopher Giancarlo has been appointed acting Head of the CFTC and is expected to be confirmed in the near term.  While he has been a critic of the timing of the VM requirements, he has expressed overall support for the rule. In his statement yesterday regarding the no action relief, Mr. Giancarlo makes it clear that the CFTC “remains committed” to these requirements.
 
We have summarized the considerations to be mindful of given yesterday’s announcement. 

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