US collateral segregation highlights OTC discrepancy

Author: Danielle Myles | Published: 6 May 2011

The Commodity Futures Trading Commission (CFTC) has favoured a legal segregation model for cleared swap margin requirements. This brings discrepancies between US and EU over-the-counter (OTC) derivative reforms to the fore.

With the US’s OTC derivative regulations due in two months, tensions between the Securities Exchange Commission (SEC) and CFTC's approach has drawn much attention.

But collateral requirements under the EU and US proposed regimes are also still moving in different directions.

Last week the CFTC proposed a complete legal segregation model...