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August 21, 2020

CFTC Approval for Phase 5 and 6 UMR

It's been lighter on UMR reg announcements since the one year coronavirus delay, but last week CFTC formalised several UMR proposals for Phase 5 and 6…

It's been lighter on UMR reg announcements since the one year coronavirus delay, but last week CFTC formalised several UMR proposals for Phase 5 and 6.

Their key proposals include:

  • Moving the AANA calc period from June to Aug of the previous year, to March to May of the same year as go-live. The calc would use only the last day of each month for averaging, rather than the current daily average required. This would align CFTC with other global jurisdictions.
  • Allowing a Swap Dealer to use their Swap Dealer trading partner as calculation agent for SIMM. This would be solely for swaps that hedge risk incurred on trades with non-SD counterparties and is really aimed at any non-financial Swap Dealers out there in Phases 5 and 6.
  • Amending the MTA amount across IM and VM for each separately managed account (SMA), or multi-manager fund, to a fixed $50k at SMA-level from $500k at entity-level. CFTC's rationale is that this eases operational management for the asset managers.

The proposals are now out there for public comment for 30 days.

Please get in touch for any related UMR questions. At Margin Tonic we’ve accelerated the IM changes across all phases to Tier 1 banks, smaller banks and buy-side firms.


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