Minimum Transfer Amount for Uncleared Swaps Margin Requirements

SIFMA AMG sent a letter to the Department of the Treasury’s Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Farm Credit Administration, Federal Housing Finance Agency and Commodity Futures Trading Commission requesting relief relating minimum transfer amount (“MTA”) set by the uncleared swap margin rules promulgated by the Prudential Regulators and CFTC.

AMG believes that separately managed accounts should be provided an account-level MTA of $100,000 or $50,000 to reduce de minimis transfers of collateral that will burden the financial system, clients, dealers and custodians without any corresponding furtherance of the goals intended by the uncleared swap margin rules. The absence of relief will mean that pension plans, endowments and other institutional clients and the financial institutions that face them will incur higher costs to use uncleared derivatives than was intended under the rules and without any added benefit to the rules’ regulatory aims.