Letter from industry association to the Commodity Futures Trading Commission, August 1, 2019
Re: Posting Cash and Money Market Funds for Initial Margin
The International Swaps and Derivatives Association (“ISDA”), Managed Funds Association (“MFA”), Securities Industry and Financial Markets Association’s Asset Management Group (“SIFMA AMG”), Investment Company Institute (“ICI”), Institutional Money Market Funds Association (“IMMFA”), and Securities Industry and Financial Markets Association (“SIFMA”) are requesting that US regulators provide relief or amendments pertaining to posting money market funds (“MMF”s) as initial margin to covered swap entities, including swap dealers, security-based swap dealers, major swap participants, and major security-based swap participants (collectively, “CSEs”) and their counterparties which will become subject to the initial margin (“IM”) requirements of the Margin and Capital Requirements for Covered Swap Entities1 (“USPR rule”) and the Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants2 (“CFTC rule”) (collectively, the “US Margin Rules.”) Specifically, we request that the US prudential regulators and the CFTC provide relief or rule amendments to expand the types of money market funds that can be used as eligible collateral, including allowing non-US MMFs. We also request that the US prudential regulators permit substituted compliance with EU margin rules.