CFTC takes aim at unguaranteed accounts

Author: Zoe Thomas | Published: 15 Jul 2015

An effort to avoid regulatory arbitrage in uncleared swap margin regulation may force banks to change course on plans to de-guarantee foreign subsidiaries.

The Commodity Futures Trading Commission’s (CFTC) latest proposal, released on June 29, is a hybrid of plans the CFTC put forward last year to address a lack of cross-border regulation in the swap market. The plan, which was unanimously voted on by the commissioners, would take a broad approach to what is captured by the regulatory net, and goes counter to guidance that was previously issued.

"As cross-border regulations look to move to a more harmonised approach and lower risk it may be that people take a wait-and-see approach," said Anthony Perrotta, head of fixed income research for the Tabb Group. "We haven’t see...