On October 22 and 30, 2015, the U.S. Prudential Regulators adopted final rules establishing margin requirements for non-cleared swaps and security based swaps entered into by registered swap dealers, major swap participants, security based swap dealers and major security-based swap participants that are banks or otherwise subject to oversight by the Prudential Regulators. Subsequently, on December 16, 2015, the U.S. Commodity Futures Trading Commission adopted final rules establishing margin requirements for non-cleared swaps entered into by registered swap dealers and major swap participants that do not have a Prudential Regulator.
In our memo, we provide a brief summary of these new final rules and describe the wide range of complex commercial, documentation and operational challenges that they will pose to swap market participants, especially in the cross-border context.