United States: CFTC Proposes to Broaden Scope of Eligible Collateral for Initial Margin
By: Kenneth Holston, Cheryl Isaac, Matthew Rogers and Gustavo De La Cruz Reynozo
On July 26, 2023, the Commodity Futures Trading Commission (“CFTC”) proposed an amendment (“Proposal”) to, among other things, expand the universe of eligible collateral for the CFTC’s initial margin (“IM”) requirements for uncleared swaps. The Proposal would result in swap dealers that are not subject to prudential regulation being able to use a broader range of money market funds (“MMFs”) and similar funds as collateral to meet their uncleared swap IM requirements under CFTC Regulation 23.156(a)(1)(ix).
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