CFTC approves margin requirement amendment
14 July 2026 US
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The Commodity Futures Trading Commission (CFTC) has approved a final rule that amends margin requirements for uncleared swaps for swap dealers and major swap participants who are not subject to prudential regulator margin rules.
In the final rule, the Commission revised the definition of 鈥渕argin affiliate鈥�.
Certain collective investment vehicles that receive start-up capital from a sponsor entity (seeded funds) will not have any margin affiliates or constitute margin affiliates of another entity, when calculating thresholds that trigger the requirement to exchange initial margin for uncleared swaps.
The amendment relieves swap dealers and major swap participants from the CFTC uncleared swap margin rules from posting and collecting initial margin with eligible seeded funds, for up to three years after the asset manager begins investing on behalf of the fund.
Michael S. Selig, Chairman of CFTC, states: 鈥淔rom the outset of my chairmanship, I have been clear that the CFTC will pursue a rulemaking agenda that prioritises responsible innovation.
鈥淭oday鈥檚 final rule related to seeded funds achieves this by unlocking liquidity for capital allocators and expanding the types of assets that qualify as eligible collateral for certain derivatives transactions.鈥�
The Commission also eliminated a provision that previously disqualified securities issued by certain pooled investment funds (such as money market and similar funds) from being used as eligible initial margin collateral for uncleared swaps if asset managers transferred fund assets through securities lending, securities borrowing, repo, reverse repo, and similar arrangements.
According to the CFTC, this amendment expands the scope of assets that qualify as eligible collateral.
Additionally, the Commission revised the haircut schedule for eligible margin collateral by adopting specific percentage haircuts for money market and similar funds.
In the final rule, the Commission revised the definition of 鈥渕argin affiliate鈥�.
Certain collective investment vehicles that receive start-up capital from a sponsor entity (seeded funds) will not have any margin affiliates or constitute margin affiliates of another entity, when calculating thresholds that trigger the requirement to exchange initial margin for uncleared swaps.
The amendment relieves swap dealers and major swap participants from the CFTC uncleared swap margin rules from posting and collecting initial margin with eligible seeded funds, for up to three years after the asset manager begins investing on behalf of the fund.
Michael S. Selig, Chairman of CFTC, states: 鈥淔rom the outset of my chairmanship, I have been clear that the CFTC will pursue a rulemaking agenda that prioritises responsible innovation.
鈥淭oday鈥檚 final rule related to seeded funds achieves this by unlocking liquidity for capital allocators and expanding the types of assets that qualify as eligible collateral for certain derivatives transactions.鈥�
The Commission also eliminated a provision that previously disqualified securities issued by certain pooled investment funds (such as money market and similar funds) from being used as eligible initial margin collateral for uncleared swaps if asset managers transferred fund assets through securities lending, securities borrowing, repo, reverse repo, and similar arrangements.
According to the CFTC, this amendment expands the scope of assets that qualify as eligible collateral.
Additionally, the Commission revised the haircut schedule for eligible margin collateral by adopting specific percentage haircuts for money market and similar funds.
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