Tag Archives: segregation of collateral

Comparing Collateral Segregation Regimes for Uncleared Swap Margin

The proposed margin rules from the CFTC and the prudential regulators, when considered alongside the existing CFTC collateral segregation rules, present the potential for three different collateral segregation regimes applying to initial margin posted to a swap dealer. To compare the differences, we have created a chart of the three collateral segregation regimes.… Continue Reading

A Lesson From MF Global: Trading Foreign Futures? Ask for FCM to Use Net Liquidating Equity Method

For better or worse, it turns out that market failures tend to be the best teachers. Case in point…The trading of non-U.S. futures contract through a U.S. futures commission merchant. Here is a selection from the April 24th Report from the MF Global Trustee to the Senate Banking Committee (available here): Under current rules, FCMs … Continue Reading

Mutual Fund Corner: SEC’s Derivatives Concept Release – Practical Considerations for 1940 Act Counsel

OVERVIEW & THE PURPOSE OF THIS POSTING On August 31st, the Securities and Exchange Commission approved the issuance of a concept release (SEC Release No. IC-29776) entitled, the "Use of Derivatives by Investment Companies Under the Investment Company Act of 1940" (available here). According to the SEC, the release is part of a larger project … Continue Reading

Article from Securities Technology Monitor: Segregation of Swap Collateral Posted to Swap Dealer FCM by Customers

Chris Kentouris of Securities Technology Monitor recently authored an article entitled, "" available here. The article will provide you with a good, high-level summary of the status of the development of certain key issues in the OTC clearing discussion in the U.S.: 1) The mechanics of customer collateral segregation by a futures commission merchant / clearinghouse in … Continue Reading

Mutual Fund Corner: The SEC Concept Release On Derivatives

Can be found here. We are reading it now, so more to come soon… In the meantime, here is the SEC’s summary of what is in that release. The Securities and Exchange Commission (the "Commission") and its staff are reviewing the use of derivatives by management investment companies registered under the Investment Company Act of … Continue Reading

A Half-Time Report from The CFTC Roundtable on Individual Customer Collateral Protection

This roundtable is now on break and here is the half-time report. BUYSIDE COMMENTS: Not all clients choose tri-party control agreements, but those who do understand that there are incremental costs and are willing to pay those incremental costs. The re-tooling of the market as a result of movement from bi-lateral to cleared OTC markets … Continue Reading

CFTC Roundtable: Individual Customer Collateral Protection

WHAT: CFTC Roundtable on Individual Customer Collateral Protection. Topics  to be discussed: 1) Concerns of customers that trade derivatives with respect to safety of their collateral 2) Models to address those concerns and how to implement such models 3) Structural changes to existing clearing architecture to implement those models 4) Cost of such changes BENEFIT OF … Continue Reading