MFA Letter to Prudential Regulators on Uncleared Initial Margin Phase In

MFA submitted a letter on June 20 to the U.S. prudential regulators to request certain regulatory measures to facilitate orderly initial margin phase-in implementation under their final rule on “Margin and Capital Requirements for Covered Swap Entities.”

MFA’s two main requests are:

1) adopt the BCBS-IOSCO guidance statement as helpful clarifying guidance for market participants to manage and prioritize their resources;

2) provide a six-month forbearance period for those Phase 5 counterparty relationships that will not initially exceed the applicable 50 million US$/Euro regulatory IM exchange threshold but later exceed such exchange threshold.