MFA urged the SEC and CFTC to establish a principles-based framework for portfolio and cross-margining that reflects the net risk of economically related positions.
MFA explains that:
- Margin offsets should be permitted when positions share the same or substantially overlapping economic risks.
- Margin calculations should account for differences in maturity, liquidity, asset segregation, and insolvency treatment.
- Cross-margining arrangements should include contingency measures to prevent sudden collateral demands during operational disruptions.
- A single lead regulator should oversee each program wherever legally permitted.
