CFTC creates grace period for complying with variation margin requirements

The Commodity Futures Trading Commission (CFTC) announcement of a six-month transition period for firms to come into compliance with new variation margin requirements was applauded by SIFMA’s Asset Management Group this week.
The CFTC’s compliance date remains March 1, but now there is a six-month grace period for firms to comply with new rules.

“We commend the CFTC and acting chairman Giancarlo for taking proactive measures to ensure new variation margin requirements are implemented smoothly without unnecessary negative impact to investors” Kenneth Bentsen, Jr., SIFMA president and CEO, said. “SIFMA’s asset manager members note that a transition period will enable them to come into compliance with rules without hampering their ability to make important trades that help clients achieve their financial goals.”

Laura Martin, managing director and associate general counsel for SIFMA Asset Management Group, called it a prudent step.

“With this action, market participants can focus on the work needed to bring buy side trading relationships into compliance with the new standards while allowing retirement funds, mutual funds and other clients to continue trading during the 6-month grace period,” Martin said.

SIFMA’s Asset Management Group members represent U.S. asset management firms whose combined global assets under management exceed $34 trillion. The clients of SIFMA AMG member firms include individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds.