Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants

As Enacted ( Federal Register)

Cited authorities 13

Cited in

Published date	25 January 2021
Citation	86 FR 6850
Record Number	2020-27508
Section	Rules and Regulations
Court	Commodity Futures Trading Commission

6850

Federal Register / Vol. 86, No. 14 / Monday, January 25, 2021 / Rules and Regulations

See generally Margin Requirements for

Uncleared Swaps for Swap Dealers and Major Swap

Participants, 81 FR 636 (Jan. 6, 2016). The CFTC

Margin Rule, which became effective April 1, 2016,

is codified in part 23 of the Commission’s

regulations. 17 CFR 23.150—23.159, 23.161. In May

2016, the Commission amended the CFTC Margin

Rule to add Regulation 23.160, 17 CFR 23.160,

providing rules on its cross-border application. See

generally Margin Requirements for Uncleared

Swaps for Swap Dealers and Major Swap

Participants—Cross-Border Application of the

Margin Requirements, 81 FR 34818 (May 31, 2016).

Commission regulations are found at 17 CFR part

1 et seq. (2017), and may be accessed through the

Commission’s website, https://www.cftc.gov.

7 U.S.C. 6s(e) (capital and margin requirements).

CEA section 1a(39), 7 U.S.C. 1a(39) (defining the

term ‘‘prudential regulator’’ to include the Board of

Governors of the Federal Reserve System; the Office

of the Comptroller of the Currency; the Federal

Deposit Insurance Corporation; the Farm Credit

Administration; and the Federal Housing Finance

Agency). The definition of prudential regulator

specifies the entities for which these agencies act

as prudential regulators.

VM (or variation margin), as defined in

Regulation 23.151, is the collateral provided by a

party to its counterparty to meet the performance

of its obligation under one or more uncleared swaps

between the parties as a result of a change in the

value of such obligations since the trade was

executed or the last time such collateral was

provided. 17 CFR 23.151.

See definition of ‘‘financial end user’’ in

Regulation 23.151. In general, the definition covers

entities involved in regulated financial activity,

including banks, brokers, intermediaries, advisers,

asset managers, collective investment vehicles, and

insurers. 17 CFR 23.151.

IM (or initial margin) is the collateral (calculated

as provided by §23.154 of the Commission’s

regulations) that is collected or posted in

connection with one or more uncleared swaps

pursuant to §23.152. IM is intended to secure

potential future exposure following default of a

counterparty (i.e., adverse changes in the value of

an uncleared swap that may arise during the period

of time when it is being closed out). See CFTC

Margin Rule, 81 FR at 683.

17 CFR 23.152; 17 CFR 23.153.

See 17 CFR 23.157(a).

Regulation 23.157 does not require VM to be

maintained in a custodial account. 17 CFR 23.157.

17 CFR 23.152(b)(3); 17 CFR 23.153(c); 81 FR

at 653.

17 CFR 23.151 (defining the term ‘‘minimum

transfer amount’’).

ANM WY D Gillette, WY [Remove]

Gillette-Campbell County Airport, WY

(Lat. 44°20′56″ N, long. 105°32′22″ W)

Paragraph 6002 Class E Airspace

Designated as Surface Areas.

* * * * *

ANM WY E2 Gillette, WY [New]

Northeast Wyoming Regional Airport, WY

(Lat. 44°20′56″ N, long. 105°32′22″ W)

That airspace extending upward from the

surface to and including 6,900 feet MSL

within a 5-mile radius of the Northeast

Wyoming Regional Airport. This Class E

airspace is effective during the specific dates

and times established in advance by a Notice

to Airmen. The effective date and time will

thereafter be continuously published in the

Chart Supplement.

Paragraph 6004 Class E Airspace Areas

Designated as an Extension to a Class D or

Class E Surface Area.

* * * * *

ANM WY E4 Gillette, WY [Amended]

Northeast Wyoming Regional Airport, WY

(Lat. 44°20′56″ N, long. 105°32′22″ W)

That airspace extending upward from the

surface within 3.4 miles each side of the

Northeast Wyoming Regional Airport 170°

bearing extending from the 5-mile radius to

12 miles south of the airport.

Paragraph 6005 Class E Airspace Areas

Extending Upward From 700 Feet or More

Above the Surface of the Earth.

* * * * *

ANM WY E5 Gillette, WY [Amended]

Northeast Wyoming Regional Airport, WY

(Lat. 44°20′56″ N, long. 105°32′22″ W)

That airspace extending upward from 700

feet above the surface of the earth within 4

miles each side of the Northeast Wyoming

Regional Airport 170° bearing extending from

the 5-mile radius to 14 miles south of the

airport, and that airspace 4 miles each side

of the 350° bearing extending from the 5-mile

radius to 11 miles north of the airport.

Issued in Seattle, Washington, on January

14, 2021.

Byron Chew,

Acting Group Manager, Operations Support

Group, Western Service Center.

[FR Doc. 2021–01306 Filed 1–22–21; 8:45 am]

BILLING CODE 4910–13–P

COMMODITY FUTURES TRADING

COMMISSION

17 CFR Part 23

RIN 3038–AF06

Margin Requirements for Uncleared

Swaps for Swap Dealers and Major

Swap Participants

AGENCY

: Commodity Futures Trading

Commission.

ACTION

: Final rule.

SUMMARY

: The Commodity Futures

Trading Commission (‘‘Commission’’ or

‘‘CFTC’’) is amending the margin

requirements for uncleared swaps

(‘‘Final Rule’’) for swap dealers (‘‘SD’’)

and major swap participants (‘‘MSP’’)

for which there is not a prudential

regulator (‘‘CFTC Margin Rule’’). The

Final Rule amends the CFTC Margin

Rule to permit the application of a

minimum transfer amount (‘‘MTA’’) of

up to $50,000 for each separately

managed account (‘‘SMA’’) of a legal

entity that is a counterparty to an SD or

MSP in an uncleared swap transaction

and to permit the application of separate

MTAs for initial margin (‘‘IM’’) and

variation margin (‘‘VM’’).

DATES

: This Final Rule is effective

February 24, 2021.

FOR FURTHER INFORMATION CONTACT

Joshua B. Sterling, Director, 202–418–

6056, jsterling@cftc.gov; Thomas J.

Smith, Deputy Director, 202–418–5495,

tsmith@cftc.gov; Warren Gorlick,

Associate Director, 202–418–5195,

wgorlick@cftc.gov; Liliya Bozhanova,

Special Counsel, 202–418–6232,

lbozhanova@cftc.gov; or Carmen

Moncada-Terry, Special Counsel, 202–

418–5795, cmoncada-terry@cftc.gov,

Market Participants Division,

Commodity Futures Trading

Commission, Three Lafayette Centre,

1155 21st Street NW, Washington, DC

20581.

SUPPLEMENTARY INFORMATION

I. Background

A. Statutory and Regulatory Background

In January 2016, the Commission

adopted Regulations 23.150 through

23.161, namely the CFTC Margin Rule,

to implement section 4s(e) of the

Commodity Exchange Act (‘‘CEA’’),

which requires SDs and MSPs for which

there is not a prudential regulator

(‘‘covered swap entity’’ or ‘‘CSE’’) to

meet minimum IM and VM

requirements adopted by the

Commission by rule or regulation.

Regulations 23.152 and 23.153 require

CSEs to collect or post, each business

day, VM

for uncleared swap

transactions with each counterparty that

is an SD, MSP, or financial end user,

and IM

for uncleared swap

transactions for each counterparty that

is an SD, MSP, or a financial end user

that has material swaps exposure.

posted or collected by a CSE must be

held by one or more custodians that are

not affiliated with the CSE or the

counterparty.

VM posted or collected

by a CSE is not required to be

maintained with a custodian.

To alleviate the operational burdens

associated with making de minimis

margin transfers without resulting in an

unacceptable level of uncollateralized

credit risk, Regulations 23.152(b)(3) and

23.153(c) provide that a CSE is not

required to collect or post IM or VM

with a counterparty until the combined

amount of such IM and VM, as

computed under Regulations 23.154 and

23.155 respectively, exceeds an MTA of

$500,000.

The term MTA (or

minimum transfer amount) is further

defined in Regulation 23.151 as a

combined amount of IM and VM, not

exceeding $500,000, under which no

exchange of IM or VM is required.

Once the MTA is exceeded, the SD or

MSP must collect or post the full

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See 17 CFR 23.152(b)(3); 17 CFR 23.153(c).

Pursuant to a Commission plan of

reorganization, DSIO was renamed Market

Participants Division (‘‘MPD’’) effective November

8, 2020.

CFTC Letter No. 17–12, Regulations

23.152(b)(3) and 23.153(c): No-Action Position

for Minimum Transfer Amount with respect to

Separately Managed Accounts (Feb. 13, 2017)

(‘‘Letter 17–12’’), https://www.cftc.gov/idc/groups/

public/@lrlettergeneral/documents/letter/17-12.pdf.

Id.

The ISDA master agreement is a standard

contract published by ISDA commonly used in

over-the-counter derivatives transactions that

governs the rights and obligations of parties to a

derivatives transaction. A CSA sets forth the terms

of the collateral arrangement for the derivatives

transaction.

CFTC Letter No. 19–25, Regulations 23.151,

23.152, and 23.153—Staff Time-Limited No-Action

Position Regarding Application of Minimum

Transfer Amount under the Uncleared Margin Rules

(Dec. 6, 2019) (‘‘Letter 19–25’’), https://

www.cftc.gov/csl/19-25/download.

See Recommendations to Improve Scoping and

Implementation of Initial Margin Requirements for

Non-Cleared Swaps, Report to the CFTC’s Global

Markets Advisory Committee by the Subcommittee

on Margin Requirements for Non-Cleared Swaps

(May 2020), https://www.cftc.gov/media/3886/

GMAC_051920MarginSubcommitteeReport/

download (‘‘GMAC Subcommittee Report’’ or

‘‘Report’’). The Global Markets Advisory Committee

(‘‘GMAC’’) established the GMAC Subcommittee to

consider issues raised by the implementation of

margin requirements for non-cleared swaps, to

identify challenges associated with forthcoming

implementation phases, and to make

recommendations through a report. The GMAC

Subcommittee issued the GMAC Subcommittee

Report recommending various actions, including

the codification of Letters 17–12 and 19–25. The

GMAC adopted the Report and recommended to the

Commission that it consider adopting the Report’s

recommendations.

See Margin Requirements for Uncleared Swaps

for Swap Dealers and Major Swap Participants, 85

FR 59470 (Sept. 22, 2020).

Comments were submitted by the following

entities: American Council of Life Insurers

(‘‘ACLI’’); Futures Industry Association (‘‘FIA’’);

Investment Company Institute (‘‘ICI’’); ISDA, Global

Foreign Exchange Division (‘‘GFXD’’) of the Global

Financial Markets Association (‘‘GFMA’’), and

Securities Industry and Financial Markets

Association (‘‘SIFMA’’) in a joint letter (‘‘ISDA/

GFMA/SIFMA’’); Managed Funds Association

(‘‘MFA’’); and SIFMA AMG. The comment letters

are available at https://comments.cftc.gov/

PublicComments/CommentList.aspx?id=4155.

amount of both IM and VM required to

be exchanged with the counterparty.

During the implementation of the

CFTC Margin Rule, market participants

identified certain operational and

compliance burdens associated with the

application of the MTA. To mitigate

these burdens, the Division of Swap

Dealer and Intermediary Oversight

(‘‘DSIO’’) staff issued two no-action

letters.

B. DSIO No-Action Letter No. 17–12

Addressing the Application of MTA to

SMAs

In February 2017, DSIO staff issued a

no-action letter in response to a request

for relief from the Securities Industry

and Financial Markets Association’s

Asset Management Group (‘‘SIFMA

AMG’’).

Staff stated that based on

SIFMA AMG’s representations, it would

not recommend enforcement action

against an SD that does not comply with

the MTA requirements of Regulations

23.152(b)(3) or 23.153(c) with respect to

the swaps of a legal entity that is the

owner of multiple SMAs, provided that,

among other conditions, the SD applies

an MTA no greater than $50,000 to each

SMA.

SIFMA AMG sought no-action relief

on behalf of members—asset

management firms whose clients

include large institutional investors,

such as pension plans and endowments,

that hire asset managers to exercise

investment discretion over portions of

the clients’ assets for management in

SMAs—that enter into uncleared swaps

with SDs that are registered with the

Commission and are subject to the CFTC

Margin Rule.

SIFMA AMG requested

relief that would permit SDs entering

into swaps with SMAs to treat each

SMA separately for the purposes of

applying the MTA.

SIFMA AMG argued that the

application of the MTA at the SMA

owner or legal entity level presented

significant practical challenges for

SMAs that trade uncleared swaps with

a single SD. SIFMA AMG stated that

each SMA is governed by an investment

management agreement that grants asset

managers authority over a portion of

their client’s assets. An SD may face the

same legal entity as a counterparty

through multiple SMAs administered by

different asset managers. Each SMA that

trades derivatives typically has its own

payment netting set corresponding to

each International Swaps and

Derivatives Association (‘‘ISDA’’) master

agreement and credit support annex

(‘‘CSA’’) used by an asset manager.

Because the SMAs exist independently

from each other, with their assets held,

transferred, and returned separately at

the account level, SIFMA AMG asserted

that it is impractical for asset managers

to collectively calculate the MTA across

the SMAs of a single owner and to move

collateral, in the aggregate, across the

accounts.

C. DSIO No-Action Letter No. 19–25

Concerning the Application of Separate

MTAs for IM and VM

In December 2019, DSIO staff issued

an additional no-action letter

concerning the application of the MTA

in response to a request for relief from

ISDA on behalf of its member SDs.

DSIO stated that based on ISDA’s

representations, it would not

recommend enforcement action against

an SD or MSP that does not combine IM

and VM amounts for the purposes of

Regulations 23.152(b)(3) and 23.153(c).

More specifically, the no-action position

covers SDs or MSPs that apply separate

MTAs for IM and VM obligations on

uncleared swap transactions with each

swap counterparty, provided that the

combined MTA for IM and VM with

respect to that counterparty does not

exceed $500,000.

In its request for no-action relief,

ISDA stated that separate MTAs for IM

and VM better reflect the operational

requirements and the legal structure of

the Commission’s regulations, noting

that the CFTC Margin Rule requires IM

to be segregated with an unaffiliated

third party, while not imposing similar

segregation requirements with respect to

VM. ISDA asserted that, as a result,

distinct workflows have been

established for the settlement of IM

through custodians and tri-party agents

that are completely separate from the

settlement process for VM.

D. Market Participant Feedback and

Proposal

Swap market participants, including a

subcommittee established by the CFTC’s

Global Markets Advisory Committee

(‘‘GMAC Subcommittee’’), expressed

support for the adoption of regulations

consistent with the no-action letters,

noting that Letter 19–25, in particular, is

time-limited and, more generally, the

codification of no-action positions can

be beneficial in that it can provide

certainty to market participants with

respect to the application of the

Commission’s regulations.

Consistent with this feedback, the

Commission has expressed the view that

adopting regulations in accordance with

the terms of no-action letters, where

feasible, can facilitate efforts by market

participants to take the operation of the

Commission’s regulations into account

in planning their uncleared swap

activities. Accordingly, based on its

experience implementing the CFTC

Margin Rule and the administration of

Letters 17–12 and 19–25, the

Commission decided to issue a notice of

proposed rulemaking (‘‘Proposal’’) to

amend the CFTC Margin Rule consistent

with the staff positions set forth in those

no-action letters, and to request

comments on the Proposal.

II. Final Rule

The Commission received six

comment letters, all of which expressed

support for the Proposal.

Commenters

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See ACLI at 1; FIA at 4.

See ISDA/GFMA/SIFMA at 2; SIFMA AMG at

See 81 FR at 653 (rejecting commenters’ request

to extend to each separate account of a fund or plan

its own initial margin threshold, while

acknowledging that separate managers acting for the

same fund or plan may not take steps to inform the

fund or plan of their uncleared swap exposures on

behalf of their principal on a frequent basis).

GMAC Subcommittee Report at 16.

See ICI at 6; ISDA/GFMA/SIFMA at 2; SIFMA

AMG at 3. See also MFA at 3 (noting that the

amendment to the MTA definition would eliminate

the significant burden of requiring multiple asset

managers running SMAs for the same SMA owner

to coordinate the calculation of the MTA among

them).

See, e.g., ICI at 6.

The Commission notes that Regulation

23.410(c)(1)(i) prohibits disclosure by an SD or

MSP, including a CSE, of confidential information

provided by or on behalf of a counterparty to the

SD or MSP. Nevertheless, Regulation 23.410(c)(2)

provides that the SD or MSP may disclose the

counterparty’s confidential information if the

disclosure is authorized in writing by the

counterparty.

As further discussed below, the application of

the MTA, as provided in this Final Rule, is only

available for separate accounts of an owner that,

consistent with the definition of SMA, as adopted

by the Final Rule, are not subject to collateral

agreements that provide for netting across separate

accounts.

generally noted that the proposed

amendments represent practical

solutions that ease the operational

burden of compliance with the CFTC

Margin Rule without materially

increasing systemic risk. Two

commenters also noted that while

consistent approaches to derivatives

regulation are desirable, the

Commission should adopt the proposed

amendments even if the prudential

regulators do not adopt similar

changes.

Several commenters

highlighted the importance of the

regulatory certainty that the adoption of

regulations consistent with existing no-

action relief would bring.

The comments confirm the rationale

articulated for the Proposal. As such,

the Commission is adopting the

amendments to Regulations 23.151,

23.152(b)(3), 23.153(c) and 23.158(a), as

proposed.

A. Application of MTA to SMAs

The Commission is adopting the

proposed amendment to the definition

of MTA in Regulation 23.151 to allow a

CSE to apply an MTA of up to $50,000

to each SMA owned by a counterparty

with whom the CSE enters into

uncleared swaps. The amendment is

consistent with the terms of Letter 17–

12, which provides that DSIO would not

recommend enforcement action if an SD

applies an MTA no greater than $50,000

to each SMA of a legal entity, subject to

certain conditions.

As discussed in the Proposal, when

the Commission adopted the CFTC

Margin Rule, it rejected the notion that

SMAs of a legal entity should be treated

separately from each other in applying

certain aspects of the margin

requirements for uncleared swaps.

However, after implementing the margin

requirements for several years, and in

particular, administering the application

of the MTA, including the staff’s

issuance of Letter 17–12, the

Commission believes that separately

treating SMAs, at least with respect to

the application of the MTA, is

appropriate from an operational

perspective.

The Commission notes, as discussed

in the Proposal, that certain owners of

SMAs, such as pension funds, in

administering investments for

beneficiaries, may engage in collateral

management exercises and may have the

capability to aggregate collateral across

their SMAs. As such, a beneficial owner

may be able to aggregate the MTA across

its SMAs that trade with a particular

CSE and centralize the management of

collateral for the SMAs, which may

result in increased netting among the

SMAs and the CSE, and more efficient

collateral management. However, the

Commission points out that other SMA

owners may not have such capability

because, as noted in the GMAC

Subcommittee Report, the SMA owners

may not be able to coordinate trading

activity across their SMAs, given that

they typically grant full investment

discretion to their asset managers and

do not employ a centralized collateral

manager in-house.

In theory, while asset managers could

coordinate with each other the

calculation of the MTA across SMAs

under their management, the

Commission believes that accepted

market practice may preclude the

sharing of information among asset

managers. In this regard, the

Commission notes that the GMAC

Subcommittee Report stated that owners

of SMAs typically prohibit information

sharing among their SMAs and require

asset managers to keep trading

information confidential, with the result

that asset managers lack transparency

and control over the assets of the SMA

owner other than the specific assets

under their management.

The Commission requested comment

on the feasibility of coordination among

asset managers. Several commenters,

consistent with the GMAC

Subcommittee Report’s findings,

indicated that confidentiality

requirements and logistical

impediments prevent asset managers

from aggregating IM and VM obligations

across SMAs for purposes of

determining whether the MTA

threshold has been exceeded, rendering

the application of a single MTA across

SMAs impractical.

Commenters

further asserted that the ability to apply

a separate MTA to each SMA is critical

for asset managers that provide services

to clients through an SMA structure.

Likewise, the Commission believes

that confidentiality requirements may

also preclude communications between

a CSE and individual asset managers of

SMAs of an owner concerning the

owner’s overall trading activity. As

discussed in the GMAC Subcommittee

Report, a duty of confidentiality to the

legal entity may prevent a CSE from

sharing information across the asset

managers of SMAs of a legal entity.

a result, even though each SMA of an

owner may contribute to reaching the

MTA limit, asset managers for the SMAs

may only know the amounts of IM and

VM being contributed by SMAs under

their management.

In light of the practical challenges that

the calculation of the MTA across SMAs

poses, as described above, the

Commission is amending Regulation

23.151 to allow CSEs to apply an MTA

of up to $50,000 for each SMA of a

counterparty. The Commission notes,

however, that under this application of

the MTA to SMAs, as adopted, an MTA

of up to $50,000 could be applied to an

indefinite number of SMAs. This

application of the MTA would

effectively replace the aggregate limit of

$500,000 for a particular counterparty’s

uncollateralized risk for uncleared

swaps with an individual limit of

$50,000 for each SMA of such

counterparty. In turn, the counterparty

could have an aggregate amount of

uncollateralized risk in excess of

$500,000.

This application of the MTA to SMAs

could incentivize owners of SMAs to

create separate accounts by formulating

trading strategies to reduce or avoid

margin transfers. However, the

Commission believes that the inability

to net collateral across separate accounts

would stem the indiscriminate creation

of SMAs

because the MTA for SMAs,

as adopted in this Final Rule, is set at

a low level (i.e., $50,000), and any

potential benefits resulting from the

avoidance of margin transfers would

become less meaningful, as the

fragmentation of an owner’s investments

among SMAs would reduce the ability

to aggregate swaps positions and net

collateral.

Several commenters agreed with the

Commission’s view that the potential

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See ICI at 7; MFA at 3; SIFMA AMG at 4.

See ICI at 7, MFA at 3.

See ICI at 7.

As further discussed below, the Final Rule

defines the term SMA as an account managed by

an asset manager pursuant to a specific grant of

authority to such asset manager under an

investment management agreement between the

counterparty and the asset manager with respect to

a specified portion of the counterparty’s assets.

See SIFMA AMG at 4.

See 7 U.S.C. 6s(j).

17 CFR 23.600.

The definition of the term SMA, as adopted,

refers to the aggregate account of a counterparty

managed by an asset manager under the investment

management agreement, and not to fund or pool

sleeves overseen by sub-advisers.

See 17 CFR 23.157 (requiring IM to be

segregated with an independent custodian. The

CFTC Margin Rule does not impose similar

segregation requirements with respect to VM).

Letter 19–25 describes the application of

separate MTAs for IM and VM with the following

illustration: An SD and a counterparty agree to a

$300,000 IM MTA and a $200,000 VM MTA. If the

margin calculations set forth in Commission

regulations 23.154 (for IM) and 23.155 (for VM)

require the SD to post $400,000 of IM with the

counterparty and $150,000 of VM with the

counterparty, the SD will be required to post

$400,000 of IM with the counterparty (assuming

that the $50 million IM threshold amount, defined

in Commission regulation 23.151, for the

counterparty has been exceeded). The SD, however,

will not be obligated to post any VM with the

counterparty as the $150,000 requirement is less

than the $200,000 MTA. By contrast, in the absence

of relief, the SD would have been required to post

$550,000 (the full amount of both IM and VM),

given that the combined amount of IM and VM

exceeds the MTA of $500,000.

risk of an increase in the amount of

uncollateralized margin is mitigated by,

among other safeguards, the low MTA

thresholds and the limitations on

netting across separate accounts.

The

commenters further noted that the costs

and practical challenges associated with

establishing and maintaining SMAs are

significant and would likely override

the benefit of a marginal MTA

increase.

One commenter also argued

that it is extremely unlikely that an asset

manager could coordinate its activities

with other SMA managers to minimize

the SMA owner’s margin requirements,

given that asset managers typically

exercise discretion over a portion of the

SMA’s assets and maintain

confidentiality with respect to the

SMA’s trading activity.

Another

commenter pointed out that the

requirement that the SMAs’ asset

managers must be granted authority

over assets under their management

under the investment management

agreement

creates practical as well as

cost challenges that would further

disincentivize the creation of

unnecessary SMAs.

The Commission further notes that

there are other provisions in the CEA

and the Commission’s regulations that

would mitigate the increase in

uncollateralized credit risk resulting

from the absence of an aggregate limit in

the MTA. Specifically, section 4s(j)(2) of

the CEA requires CSEs to adopt a robust

and professional risk management

system adequate for the management of

their swap activities,

and Regulation

23.600

mandates that CSEs establish a

risk management program to monitor

and manage risks associated with their

swap activities that includes, among

other things, a description of risk

tolerance limits.

The Commission is also amending

Regulation 23.151 to add a definition for

the term SMA. The new definition of

SMA uses the definition of the term set

forth in Letter 17–12. As adopted, the

term SMA is defined as an account of

a counterparty to a CSE that is managed

by an asset manager pursuant to a

specific grant of authority to such asset

manager under an investment

management agreement between the

counterparty and the asset manager,

with respect to a specified portion of the

counterparty’s assets.

The definition

requires that the swaps of the SMA (i)

be entered into between the

counterparty and the CSE by the asset

manager pursuant to authority granted

by the counterparty to the asset manager

through an investment management

agreement; and (ii) be subject to a

master netting agreement that does not

provide for the netting of IM or VM

obligations across all SMAs of the

counterparty that have swaps

outstanding with the CSE.

The definition of SMA is designed to

limit the application of the MTA, as

prescribed by the Final Rule, to SMAs

that have dedicated netting sets under

the SMAs’ ISDA master agreements and

CSAs, or are otherwise precluded from

netting collateral across SMAs, and that

are administered by asset managers with

authority that is limited to assets

specifically under their management.

The Commission notes that the limited

authority of asset managers over the

assets of a legal entity and the practical

inability to net collateral payments

across SMAs pose obstacles in the

calculation and aggregation of the MTA

across SMAs that this Final Rule is

designed to address.

B. Application of Separate MTAs for IM

and VM

The Commission is revising the

margin documentation requirements

outlined in Regulation 23.158(a),

consistent with Letter 19–25, to

recognize that a CSE can apply separate

MTAs for IM and VM with each

counterparty in determining whether IM

or VM or both must be posted or

collected with a counterparty under

Regulation 23.152 (requiring CSEs to

exchange IM with a counterparty) or

Regulation 23.153 (requiring CSEs to

exchange VM with a counterparty).

Regulation 23.158(a), as amended, states

that if a CSE and its counterparty agree

to have separate MTAs for IM and VM,

the MTAs corresponding to IM and VM

must be specified in the margin

documentation required by Regulation

23.158, and the MTAs, on a combined

basis, must not exceed the MTA

specified in Regulation 23.151.

The Commission believes that the

amendment to Regulation 23.158(a)

accommodates a widespread market

practice that facilitates the

implementation of the CFTC margin

requirements. In administering the

application of the MTA, including the

issuance of Letter 19–25, the

Commission has recognized that, as a

practical matter, CSEs and their

counterparties maintain separate

settlement workflows for IM and VM

and agree to separate MTAs in each of

their IM and VM CSAs, which,

combined, do not exceed $500,000.

These separate settlement workflows for

IM and VM reflect, from an operational

perspective, the different segregation

requirements applicable to IM and VM

under the CFTC Margin Rule.

The Commission acknowledges that

the amendment to Regulation 23.158(a)

may result in the exchange of less

margin than the amount that would be

exchanged if the MTA were computed

on an aggregate basis.

However, the

Commission notes that because the total

amount of combined IM and VM that

would not be exchanged would

generally not exceed $500,000, the

differences in the total margin

exchanged would not be material and

would not result in an unacceptable

level of credit risk. While the MTA as

applied to SMAs, pursuant to the

amendments to Regulation 23.151, may

result in an aggregate MTA that exceeds

$500,000, the Commission nonetheless

believes that the increased level of

uncollateralized risk that might result

from the application of the MTA to

SMAs will be mitigated because the

MTA levels applicable to SMAs are set

at a very low level (i.e., $50,000), which

would reduce the incentive for SMA

owners to create additional SMAs to

avoid the transfer of margin given the

inability to net collateral across SMAs,

as provided by the Final Rule.

The Commission believes, consistent

with the views expressed by DSIO staff

in issuing Letter 19–25, that the

application of separate MTAs for IM and

VM, subject to certain conditions, will

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See Commission Delegated Regulation (EU)

2016/2251 Supplementing Regulation (EU) No. 648/

2012 of the European Parliament and of the Council

of July 4, 2012 on OTC Derivatives, Central

Counterparties and Trade Repositories with Regard

to Regulatory Technical Standards for Risk-

Mitigation Techniques for OTC Derivative Contracts

Not Cleared by a Central Counterparty (Oct. 4,

2016), Article 25(4), https://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/

?uri=CELEX:32016R2251&from=EN.

See section 752 of the Dodd-Frank Wall Street

Reform and Consumer Protection Act, Public Law

111–203, 124 Stat. 1376 (2010), calling on the CFTC

to consult and coordinate on the establishment of

consistent international standards with respect to

the regulation of swaps.

See ACLI at 2; MFA at 4; SIFMA AMG at 4.

See e.g., ACLI at 2.

See ICI at 8.

See ICI at 9; MFA at 4.

See SIFMA AMG at 4.

5 U.S.C. 601 et seq.

Pursuant to section 2(e) of the CEA, 7 U.S.C.

2(e), each counterparty to an uncleared swap must

be an ECP, as defined in section 1a(18) of the CEA,

7 U.S.C. 1a(18).

See Further Definition of ‘‘Swap Dealer,’’

‘‘Security-Based Swap Dealer,’’ ‘‘‘Major Swap

Participant,’’ ‘‘Major Security-Based Swap

Participant’’ and ‘‘Eligible Contract Participant,’’ 77

FR 30596, 30701 (May 23, 2012).

44 U.S.C. 3501 et seq.

7 U.S.C. 19(a).

reduce the cost and burdens associated

with the transfer of small margin

balances, without undermining the

Commission’s objective of requiring

swap counterparties to protect

themselves by mitigating their credit

and market risks. The Commission

further notes that similar applications of

the MTA are permitted in certain

foreign jurisdictions, including the

European Union.

The amendment to

Regulation 23.158(a) therefore promotes

consistent regulatory standards across

jurisdictions, in line with the statutory

mandate set forth in the Dodd-Frank

Act

and reduces the need for market

participants to create and implement IM

and VM settlement flows tailored to

different jurisdictions.

A number of commenters confirmed

the Commission’s understanding that

the application of separate MTAs for IM

and VM facilitates compliance with the

CFTC Margin Rule.

Commenters noted

that if swap counterparties were

required to apply a single combined

MTA, they would need to implement

significant changes to the

documentation and operational

processes.

In particular, ICI noted that

in the absence of Letter 19–25 and this

Final Rule, counterparties would have

to reconcile two operational processes:

Margin calculation protocols that

account for a combined MTA and

separate workflows that exist for IM and

VM settlement in light of the

Commission’s segregation requirements,

which differentiate treatment for IM and

VM.

Several commenters expressed

support for extending the application of

separate MTAs for IM and VM to SMAs

for which an MTA of up to $50,000

would be applicable, noting that the

stated rationale for proposing the

revisions to Regulation 23.158(a) applies

equally to SMAs and that allowing such

application would establish a consistent

regulatory approach to applying MTA

thresholds.

In addition, noting some

ambiguity, SIFMA AMG urged the

Commission to confirm that the ability

to apply separate MTAs for IM and VM

would extend to SMAs.

In response,

the Commission confirms that the

amendments to Regulations 23.151 and

23.158(a), as adopted, permit a CSE to

apply separate MTAs for IM and VM

with each counterparty, or an SMA of a

counterparty, provided the MTAs, on a

combined basis, do not exceed the

respective limits set by Regulation

23.151. The Commission notes that the

text of the amendment to Regulation

23.158(a) refers to Regulation 23.151,

which, as amended, defines MTA and

provides for the application of an MTA

of up to $50,000 for each SMA of a

counterparty, thus allowing for the

application of separate amounts of IM

and VM to the MTA of an SMA, as

provided in amended Regulation

23.151.

C. Conforming Changes

Consistent with the amendment to the

definition of MTA in Regulation 23.151,

the Commission is adopting conforming

changes to Regulations 23.152(b)(3) and

23.153(c) by replacing ‘‘$500,000’’ with

‘‘the minimum transfer amount, as the

term is defined in 23.151.’’ The changes

replace the reference to $500,000 in

current Regulations 23.152(b)(3) and

23.153(c), which effectively limits the

MTA to $500,000, with a reference to

the revised definition of MTA, which

allows for the application of an MTA of

up to $50,000 for each SMA.

III. Administrative Compliance

The Regulatory Flexibility Act

(‘‘RFA’’) requires Federal agencies to

consider whether the rules they propose

will have a significant economic impact

on a substantial number of small

entities.

As discussed in the Proposal,

the amendments being adopted herein

only affect certain SDs and MSPs and

their counterparties, which must be

eligible contract participants

(‘‘ECPs’’).

The Commission has

previously established that SDs, MSPs

and ECPs are not small entities for

purposes of the RFA.

Therefore, the

Commission believes that the Final Rule

will not have a significant economic

impact on a substantial number of small

entities, as defined in the RFA.

Accordingly, the Chairman, on behalf

of the Commission, hereby certifies

pursuant to 5 U.S.C. 605(b) that the

Final Rule will not have a significant

economic impact on a substantial

number of small entities.

A. Paperwork Reduction Act

The Paperwork Reduction Act of 1995

(‘‘PRA’’)

imposes certain

requirements on Federal agencies,

including the Commission, in

connection with their conducting or

sponsoring any collection of

information, as defined by the PRA. The

Commission may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless it displays a currently valid

Office of Management and Budget

control number. The Final Rule, as

adopted, contains no requirements

subject to the PRA.

B. Cost-Benefit Considerations

Section 15(a) of the CEA

requires

the Commission to consider the costs

and benefits of its actions before

promulgating a regulation under the

CEA. Section 15(a) further specifies that

the costs and benefits shall be evaluated

in light of the following five broad areas

of market and public concern: (1)

Protection of market participants and

the public; (2) efficiency,

competitiveness, and financial integrity

of futures markets; (3) price discovery;

(4) sound risk management practices;

and (5) other public interest

considerations. The Commission

considers the costs and benefits

resulting from its discretionary

determinations with respect to the

section 15(a) considerations.

The Commission is amending

Regulation 23.151 consistent with Letter

17–12. The Commission is revising the

definition of MTA in Regulation 23.151

to permit CSEs to apply an MTA of up

to $50,000 for each SMA of a

counterparty that enters into uncleared

swaps with a CSE. The Commission also

is amending Regulation 23.151 to add a

definition for the term SMA (or

separately managed account). The

Commission is also revising Regulation

23.158(a) consistent with Letter 19–25

to state that if a CSE and its

counterparty agree to have separate

MTAs for IM and VM, the respective

amounts of MTA must be reflected in

the margin documentation required by

Regulation 23.158(a). Finally, the

Commission is adopting conforming

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7 U.S.C. 2(i).

See e.g., ICI at 7 and MFA at 3 (addressing the

concern that permitting the application of a

reduced, individualized MTA, as proposed, to an

indefinite number of SMAs may incentivize SMA

owners to create additional separate accounts).

changes to Regulations 23.152(b)(3) and

23.153(c) to incorporate the change to

the definition of MTA in Regulation

23.151.

The baseline for the Commission’s

consideration of the costs and benefits

of this Final Rule is the CFTC Margin

Rule. The Commission recognizes that

to the extent market participants have

relied on Letters 17–12 and 19–25, the

actual costs and benefits of the

amendments, as realized in the market,

may not be as significant.

The Commission notes that the

consideration of costs and benefits

below is based on the understanding

that the markets function

internationally, with many transactions

involving U.S. firms taking place across

international boundaries; with some

Commission registrants being organized

outside of the United States; with

leading industry members typically

conducting operations both within and

outside the United States; and with

industry members commonly following

substantially similar business practices

wherever located. Where the

Commission does not specifically refer

to matters of location, the following

discussion of costs and benefits refers to

the effects of the Final Rule on all

activity subject to the amended

regulations, whether by virtue of the

activity’s physical location in the

United States or by virtue of the

activity’s connection with activities in,

or effect on, U.S. commerce under

section 2(i) of the CEA.

As previously discussed, the

Commission received six comment

letters expressing support for the

Proposal. Commenters generally noted

that the proposed amendments are

beneficial for market participants and

characterized them as helpful and

practical accommodations that reflect

the realities of the marketplace and

facilitate compliance with the CFTC

Margin Rule. Several commenters

elaborated on specific benefits of the

amendments, noting for instance that

the amendments would eliminate

burdens associated with the application

of a single MTA across SMAs of a

counterparty, provide regulatory

certainty and contribute to global

consistency in regulatory standards.

Some commenters also addressed

concerns that the Commission had

raised in the Proposal, pointing out

mitigating factors.

1. Benefits

The amendments to Regulation 23.151

allow CSEs to apply an MTA of up to

$50,000 to SMAs of a counterparty.

Under the current requirements, a CSE

must apply the MTA with respect to

each counterparty to an uncleared

transaction. As a result, in the context

of a counterparty that has multiple

SMAs through which uncleared swaps

are traded, with each SMA potentially

giving rise to IM and VM obligations,

the amounts of IM and VM attributable

to the SMAs of the counterparty must be

aggregated to determine whether the

MTA has been exceeded, which would

require the exchange of IM or VM.

As previously discussed, because the

assets of SMAs are separately held,

transferred, and returned at the account

level, and CSEs and SMA asset

managers do not share trading

information across SMAs, aggregation of

IM and VM obligations across SMAs for

the purpose of determining whether the

MTA has been exceeded may be

impractical, hindering efforts to comply

with the CFTC Margin Rule. The

Commission acknowledges, however,

the possibility that, in certain contexts,

an owner of SMAs, such as a pension

fund that administers investments for

beneficiaries, may be set up to perform

collateral management exercises and

may have the capability to aggregate

collateral across SMAs. Nevertheless,

according to industry feedback, the only

practical alternative to fully ensure

compliance with the margin

requirements is to set the MTA for each

SMA at zero, so that trading by a given

SMA does not result in an inadvertent

breach of the aggregate MTA threshold

without the exchange of the required

margin.

The amendments to Regulation

23.151, by allowing the application of

an MTA of up to $50,000 for each SMA

of a counterparty, will ease the

operational burdens and transactional

costs associated with managing frequent

transfers of small amounts of collateral

that counterparties would incur if the

MTA for SMAs were to be set at zero.

In addition, the amendments give

flexibility to CSEs, owners of SMAs, and

asset managers to negotiate MTA levels

within the regulatory limits that match

the risks of the SMAs and their

investment strategies, and the uncleared

swaps being traded.

Furthermore, because the

amendments to Regulation 23.151

simplify the application of the MTA in

the SMA context, thereby reducing the

operational burden, market participants

may be encouraged to participate in the

uncleared swap markets through

managed accounts, and account

managers may also make their services

more readily available to clients. As a

result, trading in the uncleared swap

markets may increase, promoting

competition and liquidity.

The amendment of Regulation

23.158(a) could likewise lead to

efficiencies in the application of the

MTA. The amendment, as adopted,

states that if a CSE and its counterparty

agree to have separate MTAs for IM and

VM, the respective amounts of MTA

must be reflected in the margin

documentation required by Regulation

23.158(a). CSEs will thus be able to

maintain separate margin settlement

workflows for IM and VM to address the

differing segregation treatments for IM

and VM under the CFTC Margin Rule.

The Commission notes that the

application of separate MTAs for IM and

VM has been adopted in other

jurisdictions, including the European

Union, and the practice is widespread.

The amendments, by aligning the CFTC

with other jurisdictions with respect to

the application of the MTA, advance the

CFTC’s goal of promoting consistent

international standards, in line with the

statutory mandate set forth in the Dodd-

Frank Act.

Finally, the amendments, as adopted,

provide certainty to market participants

who may have relied on Letters 17–12

and 19–25, and could thereby facilitate

their efforts to take the operation of the

Commission’s regulations into account

in the planning of their uncleared swap

activities.

2. Costs

The amendments to Regulation 23.151

could result in a CSE applying an MTA

that exceeds, in the aggregate, the

current MTA limit of $500,000. That is

because the amendments, as adopted,

permit the application of an MTA of up

to $50,000 for each SMA of a

counterparty, without limiting the

number of SMAs to which the $50,000

threshold may be applied. The

amendments thus could incentivize

SMA owners to increase the number of

separate accounts in order to benefit

from the higher MTA limit. As a result,

the collection and posting of margin for

some SMAs may be delayed, since

margin will not need to be exchanged

until the MTA threshold is exceeded,

which could result in the exchange of

less collateral to mitigate the risk of

uncleared swaps.

The amendment to Regulation

23.158(a), as adopted, states that if a

CSE and its counterparty agree to have

separate MTAs for IM and VM, the

respective amounts of MTA must be

reflected in the margin documentation

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Supra note 38 (explaining how the application

of separate MTAs for IM and VM could result in

the exchange of lower amounts of margin than if IM

and VM MTA were computed on an aggregate

basis).

The following illustration explains how the

application of separate MTAs for IM and VM could

result in the exchange of higher amounts of margin

than if IM and VM MTA were computed on an

aggregate basis: An SD and a counterparty agree to

$300,000 IM MTA, and $200,000 VM MTA. If the

margin calculations set forth in Commission

regulations 23.154 (for IM), and 23.155 (for VM)

require the SD to post $200,000 of IM with the

counterparty and $250,000 of VM with the

counterparty, the SD would not be required to post

IM with the counterparty as the $200,000

requirement is less than the $300,000 MTA.

However, the SD would be required to post

$250,000 in VM as the VM required exceeds the

$200,000 VM MTA, even though the total amount

of margin owed is below the $500,000 MTA set

forth in Commission regulations 23.152(b)(3) and

23.153(c). Letter 19–25 at 4.

See ICI at 7; MFA at 3; SIFMA AMG at 3.

7 U.S.C. 6s(j)(2).

17 CFR 23.600.

required by Regulation 23.158(a). The

amendment recognizes that CSEs can

apply separate MTAs for IM and VM for

determining whether Regulations

23.152(b)(3) and 23.153(c) require the

exchange of IM or VM. The Commission

acknowledges that the application of

separate IM and VM MTAs may result

in the exchange of a lower amount of

total margin between a CSE and its

counterparty to mitigate the risk of their

uncleared swaps than the amount that

would be exchanged if the IM and VM

MTA were computed on an aggregate

basis.

The Commission notes that this

cost may be mitigated because the

application of separate IM and VM

MTAs could also result in the exchange

of higher rather than lower amounts of

margin.

While the Commission recognizes that

the uncollateralized exposure that may

result from amending Regulations

23.151 and 23.158(a), in line with

Letters 17–12 and 19–25, could increase

credit risk associated with uncleared

swaps, the Commission believes that a

number of safeguards exist to mitigate

this risk. The Commission notes that the

amendments, as adopted, set the MTA

at low levels. When the MTA is applied

to a counterparty, the sum of the IM and

VM MTAs must not exceed $500,000.

When the MTA is applied to an SMA of

a counterparty, the sum of the IM and

VM MTAs must not exceed $50,000. In

particular with respect to the

application of the MTA to SMAs, the

low level of the MTA may dampen the

incentive to create additional SMAs to

benefit from the potentially higher MTA

threshold given the inability to net

collateral across SMAs under the Final

Rule. Several commenters confirmed the

Commission’s assessment and some

added that the burdens and costs of

creating and maintaining separate

accounts would likely override the

benefits of any marginal increase in

MTA.

Also, the Commission notes that

other regulatory safeguards exist that

would limit the potential increase in the

credit exposure, including section

4s(j)(2) of the CEA,

which mandates

that CSEs adopt a robust and

professional risk management system

adequate for the management of day-to-

day swap activities, and Regulation

23.600,

which requires CSEs, in

establishing a risk management program

for the monitoring and management of

risk related to their swap activities, to

account for credit risk and to set risk

tolerance limits.

3. Section 15(a) Considerations

In light of the foregoing, the CFTC has

evaluated the costs and benefits of the

Final Rule pursuant to the five

considerations identified in section

15(a) of the CEA as follows:

a. Protection of Market Participants and

Public

As discussed above, the amendments

to Regulations 23.151 and 23.158(a),

which address the application of the

MTA to SMAs and the application of

separate MTAs for IM and VM, remove

practical burdens in the application of

the MTA, facilitating the

implementation of the CFTC Margin

Rule, with minimal impact on the

protection of market participants and

the public in general. Although the

amendments, as adopted, could result in

larger amounts of MTA being applied to

uncleared swaps, potentially resulting

in the exchange of reduced margin to

offset the risk of uncleared swaps, the

impact is likely to be negligible relative

to the size of the uncleared swap

positions. The Commission notes that

the MTA thresholds are set at low

levels. In addition, CSEs are required to

monitor and manage risk associated

with their swaps, in particular credit

risk, and to set tolerance levels as part

of the risk management program

mandated by Regulation 23.600. To

meet the risk tolerance levels, a CSE

may contractually limit the MTA or the

number of SMAs for a particular

counterparty with whom the CSE enters

into uncleared swap transactions.

b. Efficiency, Competitiveness, and

Financial Integrity of Markets

By amending Regulation 23.151 to

allow CSEs to apply an MTA of up to

$50,000 for each SMA of a counterparty,

the Commission eliminates burdens and

practical challenges associated with the

computation and aggregation of the

MTA across multiple SMAs. In

addition, the new MTA threshold for

SMAs could have the effect of delaying

how soon margin would be exchanged,

as the aggregate MTA for SMAs is no

longer limited to $500,000.

The simplification of the process for

applying the MTA to SMAs and the

reduced cost that may be realized from

the deferral of margin obligations may

encourage market participants to enter

into uncleared swaps through accounts

managed by asset managers and also

encourage asset managers to accept

more clients. The amendments to

Regulation 23.151 could therefore foster

competitiveness by encouraging

increased participation in the uncleared

swap markets.

The amendment to Regulation

23.158(a) states that if a CSE and its

counterparty agree to have separate

MTAs for IM and VM, the respective

amounts of MTA must be reflected in

the margin documentation required by

Regulation 23.158(a). The amendment

recognizes that CSEs can apply separate

MTAs for IM and VM, enabling CSEs to

accommodate the different segregation

treatments for IM and VM under the

CFTC’s margin requirements and to

more efficiently comply with the CFTC

Margin Rule.

The amendments to Regulations

23.151 and 23.158(a) could have the

overall effect of permitting larger

amounts of MTA being applied to

uncleared swaps, resulting in the

collection and posting of less collateral

to offset the risk of uncleared swaps,

which could undermine the integrity of

the markets. The Commission, however,

believes that the uncollateralized swap

exposure will be limited given that the

MTA thresholds are set at low levels,

and there are other built-in regulatory

safeguards, such as the requirement that

CSEs establish a risk management

program under Regulation 23.600 that

provides for the implementation of

internal risk parameters for the

monitoring and management of swap

risk.

The Commission also notes that the

amendments provide certainty to market

participants who may have relied on

Letters 17–12 and 19–25, and thereby

facilitate their efforts to take the

operation of the Commission’s

regulations into account in planning

their uncleared swap activities.

c. Price Discovery

The amendments to Regulations

23.151 and 23.158(a) simplify the

process for applying the MTA, reducing

the burden and cost of implementation.

Given these cost savings, CSEs and

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7 U.S.C. 19(b).

other market participants may be

encouraged to increase their

participation in the uncleared swap

markets. As a result, trading in

uncleared swaps may increase, leading

to increased liquidity and enhanced

price discovery.

d. Sound Risk Management

Because the amendments to

Regulations 23.151 and 23.158(a) permit

the application of larger amounts of

MTA, less margin may be collected and

posted to offset the risk of uncleared

swaps. Nevertheless, the Commission

believes that the risk is mitigated

because the regulatory MTA thresholds

are set at low levels, and CSEs are

required to have a risk management

program that provides for the

implementation of internal risk

management parameters for the

monitoring and management of swap

risk.

The Commission also notes that the

amendments simplify the application of

the MTA, reducing the burden and cost

of implementation, without leading to

an unacceptable level of

uncollateralized credit risk. Such

reduced burden and cost could

encourage market participants to

increase their participation in the

uncleared swap markets, potentially

facilitating improved risk management

for counterparties using uncleared

swaps to hedge risks. Moreover, by

facilitating compliance with certain

aspects of the Commission’s regulations,

the Commission allows market

participants to focus their efforts on

monitoring and ensuring compliance

with other substantive aspects of the

CFTC Margin Rule, thus promoting

balanced and sound risk management.

e. Other Public Interest Considerations

The amendment to Regulation

23.158(a) addresses the application of

separate MTAs for IM and VM,

contributing to the CFTC’s alignment

with other jurisdictions, such as the

European Union, which advances the

CFTC’s efforts to achieve consistent

international standards. The CFTC’s

alignment with other jurisdictions with

respect to the application of the MTA

will benefit CSEs that are global market

participants by eliminating the need to

establish different settlement workflows

tailored to each jurisdiction in which

they operate.

C. Antitrust Considerations

Section 15(b) of the CEA requires the

Commission to take into consideration

the public interest to be protected by the

antitrust laws and endeavor to take the

least anticompetitive means of

achieving the objectives of the CEA, as

well as the policies and purposes of the

CEA, in issuing any order or adopting

any Commission rule or regulation

(including any exemption under section

4(c) or 4c(b)), or in requiring or

approving any bylaw, rule, or regulation

of a contract market or registered futures

association established pursuant to

section 17 of the CEA.

The Commission believes that the

public interest to be protected by the

antitrust laws is generally to protect

competition. The Commission requested

comment on whether the Proposal

implicated any other specific public

interest to be protected by the antitrust

laws and received no comments.

The Commission has considered the

Final Rule to determine whether it is

anticompetitive and has identified no

anticompetitive effects. The

Commission requested comment on

whether the Proposal was

anticompetitive and, if it was, what the

anticompetitive effects were, and

received no comments.

Because the Commission has

determined that the Final Rule is not

anticompetitive and has no

anticompetitive effects, the Commission

has not identified any less

anticompetitive means of achieving the

purposes of the CEA.

List of Subjects 17 CFR Part 23

Swaps, Swap dealers, Major swap

participants, Capital and margin

requirements.

For the reasons stated in the

preamble, the Commodity Futures

Trading Commission amends 17 CFR

part 23 as set forth below:

PART 23—SWAP DEALERS AND

MAJOR SWAP PARTICIPANTS

■1. The authority citation for part 23

continues to read as follows:

Authority: 7 U.S.C. 1a, 2, 6, 6a, 6b, 6b–

1,6c, 6p, 6r, 6s, 6t, 9, 9a, 12, 12a, 13b, 13c,

16a, 18, 19, 21.

■2. Amend § 23.151 by:

■a. Revising the definition of

‘‘minimum transfer amount’’; and

■b. Adding in alphabetical order a

definition for ‘‘separately managed

account’’.

The revision and addition read as

follows:

§ 23.151 Definitions applicable to margin

requirements.

* * * * *

Minimum transfer amount means a

combined initial and variation margin

amount under which no actual transfer

of funds is required. The minimum

transfer amount shall be $500,000.

Where a counterparty to a covered swap

entity owns two or more separately

managed accounts, a minimum transfer

amount of up to $50,000 may be applied

for each separately managed account.

* * * * *

Separately managed account means

an account of a counterparty to a

covered swap entity that meets the

following requirements:

(1) The account is managed by an

asset manager and governed by an

investment management agreement,

pursuant to which the counterparty

grants the asset manager authority with

respect to a specified amount of the

counterparty’s assets;

(2) Swaps are entered into between

the counterparty and the covered swap

entity by the asset manager on behalf of

the account pursuant to authority

granted by the counterparty through an

investment management agreement; and

(3) The swaps of such account are

subject to a master netting agreement

that does not provide for the netting of

initial or variation margin obligations

across all such accounts of the

counterparty that have swaps

outstanding with the covered swap

entity.

* * * * *

■3. Amend § 23.152 by revising

paragraph (b)(3) to read as follows:

§ 23.152 Collection and posting of initial

margin.

* * * * *

(b) * * *

(3) Minimum transfer amount. A

covered swap entity is not required to

collect or to post initial margin pursuant

to §§ 23.150 through 23.161 with respect

to a particular counterparty unless and

until the combined amount of initial

margin and variation margin that is

required pursuant to §§ 23.150 through

23.161 to be collected or posted and that

has not been collected or posted with

respect to the counterparty is greater

than the minimum transfer amount, as

the term is defined in § 23.151.

* * * * *

■4. Amend § 23.153 by revising

paragraph (c) to read as follows:

§ 23.153 Collection and posting of

variation margin.

* * * * *

covered swap entity is not required to

collect or to post variation margin

pursuant to §§ 23.150 through 23.161

with respect to a particular counterparty

unless and until the combined amount

of initial margin and variation margin

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Recommendations to Improve Scoping and

Implementation of Initial Margin Requirements for

Non-Cleared Swaps, Report to the CFTC’s Global

Markets Advisory Committee by the Subcommittee

on Margin Requirements for Non-Cleared Swaps

(April 2020), available at https://www.cftc.gov/

media/3886/GMAC_

051920MarginSubcommitteeReport/download.

See generally BCBS/IOSCO, Margin

requirements for non-centrally cleared derivatives

(July 2019), available at https://www.bis.org/bcbs/

publ/d475.pdf.

Specifically, CEA Section 4s(j)(2), 7 U.S.C.

6s(j)(2), requires swap dealers to adopt a robust risk

management system adequate for the management

of their swap activities, and CFTC Rule 23.600, 17

CFR 23.600, requires swap dealers to establish a

risk management program to monitor and manage

risks associated with their swap activities.

Statement of Commissioner Dawn D. Stump

Regarding Final Rule: Cross-Border Application of

the Registration Thresholds and Certain

Requirements Applicable to Swap Dealers and

Major Swap Participants (July 23, 2020), available

at https://www.cftc.gov/PressRoom/

SpeechesTestimony/stumpstatement072320.

CFTC Letter No. 17–12, Commission

Regulations 23.152(b)(3) and 23.153(c): No-Action

Position for Minimum Transfer Amount with

respect to Separately Managed Accounts (February

13, 2017), available at https://www.cftc.gov/idc/

groups/public/@lrlettergeneral/documents/letter/

17-12.pdf.

that is required pursuant to §§ 23.150

through 23.161 to be collected or posted

and that has not been collected or

posted with respect to the counterparty

is greater than the minimum transfer

amount, as the term is defined in

§ 23.151.

* * * * *

■5. Amend § 23.158 by revising

paragraph (a) to read as follows:

§ 23.158 Margin documentation.

(a) General requirement. Each covered

swap entity shall execute

documentation with each counterparty

that complies with the requirements of

§ 23.504 and that complies with this

section, as applicable. For uncleared

swaps between a covered swap entity

and a counterparty that is a swap entity

or a financial end user, the

documentation shall provide the

covered swap entity with the

contractual right and obligation to

exchange initial margin and variation

margin in such amounts, in such form,

and under such circumstances as are

required by §§ 23.150 through 23.161.

With respect to the minimum transfer

amount, if a covered swap entity and a

counterparty that is a swap entity or a

financial end user agree to have separate

minimum transfer amounts for initial

and variation margin, the

documentation shall specify the

amounts to be allocated for initial

margin and variation margin. Such

amounts, on a combined basis, must not

exceed the minimum transfer amount,

as the term is defined in § 23.151.

* * * * *

Issued in Washington, DC, on December 9,

2020, by the Commission.

Robert Sidman,

Deputy Secretary of the Commission.

Note: The following appendices will not

appear in the Code of Federal Regulations.

Appendices to Margin Requirements for

Uncleared Swaps for Swap Dealers and

Major Swap Participants—Voting

Summary and Chairman’s and

Commissioners’ Statements

Appendix 1—Voting Summary

On this matter, Chairman Tarbert and

Commissioners Quintenz, Behnam, Stump,

and Berkovitz voted in the affirmative. No

Commissioner voted in the negative.

Appendix 2—Supporting Statement of

Commissioner Dawn D. Stump

Overview

I am pleased to support the final

rulemaking that the Commission is adopting

with respect to the ‘‘minimum transfer

amount’’ provisions of its margin

requirements for uncleared swaps.

This rulemaking addresses

recommendations that the Commission has

received from its Global Markets Advisory

Committee (‘‘GMAC’’), which I am proud to

sponsor, and is based on a comprehensive

report prepared by GMAC’s Subcommittee on

Margin Requirements for Non-Cleared Swaps

(‘‘GMAC Margin Subcommittee’’).

demonstrates the value added to the

Commission’s policymaking by its Advisory

Committees, in which market participants

and other interested parties come together to

provide us with their perspectives and

potential solutions to practical problems.

The rulemaking we are adopting makes

two changes to the Commission’s uncleared

margin rules, which have much to commend

them—indeed, we did not receive any

comment letters opposing them. These rule

changes further objectives that I have

commented on before:

•The need to tailor our rules to assure that

they are workable for those required to

comply with them; and

•the benefits of codifying relief that has

been issued by our Staff and re-visiting our

rules, where appropriate.

A Different Universe Is Coming Into Scope

of the Uncleared Margin Rules

The Commission’s uncleared margin rules

for swap dealers, like the Framework of the

Basel Committee on Banking Supervision

and the Board of the International

Organization of Securities Commissions

(‘‘BCBS/IOSCO’’)

on which they are based,

were designed primarily to ensure the

exchange of margin between the largest, most

systemic, and interconnected financial

institutions for their uncleared swap

transactions with one another. Today, these

institutions and transactions are subject to

uncleared margin requirements that have

taken effect since the rules were adopted.

Pursuant to the phased implementation

schedule of the Commission’s rules and the

BCBS/IOSCO Framework, though, a different

universe of market participants—presenting

unique considerations—will soon be coming

into scope of the margin rules. It is only now,

as we enter the final phases of the

implementation schedule, that the

Commission’s uncleared margin rules will

apply to a significant number of financial

end-users, and we have a responsibility to

make sure they are fit for that purpose.

Accordingly, now is the time we must

thoughtfully consider whether the regulatory

parameters that we have designed for the

largest financial institutions in the earlier

phases of margin implementation need to be

tailored to account for the practical and

operational challenges posed by the exchange

of margin when one of the counterparties is

a pension plan, endowment, insurance

provider, mortgage service provider, or other

financial end-user.

This rulemaking regarding the minimum

transfer amount (‘‘MTA’’) does exactly that.

The Commission’s uncleared margin rules

provide that a swap dealer is not required to

collect or post initial margin (‘‘IM’’) or

variation margin (‘‘VM’’) with a counterparty

until the combined amount of such IM and

VM exceeds the MTA of $500,000. Yet, the

application of the MTA presents a significant

operational challenge for institutional

investors that typically hire asset managers to

exercise investment discretion over portions

of their assets in separately managed

accounts (‘‘SMAs’’) for purposes of

diversification. As a practical matter, neither

the owner of the SMA, the manager of the

assets in the SMA, nor the swap dealer that

is a counterparty to the SMA is in a position

to readily determine when the MTA has been

exceeded on an aggregate basis (or to assure

that it is not).

To address this challenge, the Commission

is amending the definition of MTA in its

margin rules to allow a swap dealer to apply

an MTA of up to $50,000 to each SMA

owned by a counterparty with which the

swap dealer enters into uncleared swaps. As

noted in the release, any potential increase in

uncollateralized credit risk as a result would

be mitigated both by the conditions set out

in the rules we are adopting, as well as

existing safeguards in the Commodity

Exchange Act (‘‘CEA’’) and the Commission’s

regulations.

This is a sensible approach and an

appropriate refinement to make the

Commission’s uncleared margin rules

workable for SMAs given the realities of the

modern investment management

environment. As I have stated before, no

matter how well-intentioned a rule may be,

if it is not workable, it cannot deliver on its

intended purpose.

The Benefits of Codifying Staff Relief and

Re-Visiting Our Rules

Application of MTA to SMAs: The rule

change that I have discussed above regarding

the application of the MTA to SMAs would

codify no-action relief in Letter No. 17–12

that our Staff issued in 2017.

The

Commission’s Staff often has occasion to

issue relief or take other action in the form

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See comments of Commissioner Dawn D.

Stump during Open Commission Meeting on

January 30, 2020, at 183 (noting that after several

years of no-action relief regarding trading on swap

execution facilities (‘‘SEFs’’), ‘‘we have the benefit

of time and experience and it is time to think about

codifying some of that relief.... [T]he SEFs, the

market participants, and the Commission have

benefited from this time and we have an obligation

to provide more legal certainty through codifying

these provisions into rules.’’), available at https://

www.cftc.gov/sites/default/files/2020/08/

1597339661/openmeeting_013020_Transcript.pdf.

Statement of Commissioner Dawn D. Stump for

CFTC Open Meeting on: (1) Final Rule on Position

Limits and Position Accountability for Security

Futures Products; and (2) Proposed Rule on Public

Rulemaking Procedures (Part 13 Amendments)

(September 16, 2019), available at https://

www.cftc.gov/PressRoom/SpeechesTestimony/

stumpstatement091619.

CFTC Letter No. 19–25, Commission

Regulations 23.151, 23.152, and 23.153—Staff

Time-Limited No-Action Position Regarding

Application of Minimum Transfer Amount under

the Uncleared Margin Rules (December 6, 2019),

available at https://www.cftc.gov/csl/19-25/

download.

Under the Commission’s uncleared margin

rules, IM posted or collected by a swap dealer must

be held by one or more custodians that are not

affiliated with the swap dealer or the counterparty,

whereas VM posted or collected by a swap dealer

is not required to be segregated with an

independent custodian. See 17 CFR 23.157.

Margin Requirements for Uncleared Swaps for

Swap Dealers and Major Swap Participants, 81 FR

636 (Jan. 6, 2016) (‘‘Margin Rule’’).

Although addressed in the final rules, there are

currently no registered MSPs.

Section 4s(e) of the Commodity Exchange Act

(‘‘CEA’’), as amended by the Dodd-Frank Act,

requires the Commission to adopt rules for

minimum initial and variation margin for uncleared

swaps entered into by SDs and MSPs for which

there is no prudential regulator.

BCBS/IOSCO, Margin requirements for non-

centrally cleared derivatives (July 2019), available

at https://www.bis.org/bcbs/publ/d475.pdf. The

BCBS/IOSCO framework was originally

promulgated in 2013 and later revised in 2015.

Recommendations to Improve Scoping and

Implementation of Initial Margin Requirements for

Non-Cleared Swaps, Report to the CFTC’s Global

Markets Advisory Committee by the Subcommittee

on Margin Requirements for Non-Cleared Swaps

(Apr. 2020), available at https://www.cftc.gov/

media/3886/GMAC_

051920MarginSubcommitteeReport/download.

See Margin Rule, 81 FR at 645.

of no-action letters, interpretative letters, or

advisories on various issues and in various

circumstances. This affords the Commission

a chance to observe how the Staff action

operates in real-time, and to evaluate lessons

learned. With the benefit of this time and

experience, the Commission should then

consider whether codifying such Staff action

into rules is appropriate.

As I have said before, ‘‘[i]t is simply good

government to re-visit our rules and assess

whether certain rules need to be updated,

evaluate whether rules are achieving their

objectives, and identify rules that are falling

short and should be withdrawn or

improved.’’

Experience with the Staff no-

action relief in Letter No. 17–12 supports our

rule change to tailor the application of the

MTA under the Commission’s uncleared

margin rules in the SMA context.

Separate MTAs for IM and VM: The second

rule change regarding the MTA that we are

adopting similarly would codify existing

Staff no-action relief in recognition of market

realities. Consistent with Staff no-action

Letter No. 19–25,

it would recognize that a

swap dealer may apply separate MTAs for IM

and VM with each counterparty, provided

that the MTAs corresponding to IM and VM

are specified in the margin documentation

required under the Commission’s regulations,

and that the MTAs, on a combined basis, do

not exceed the prescribed MTA.

Staff’s no-action relief, and the

Commission’s rule amendments to codify

that relief, take into account the separate

settlement workflows that swap

counterparties maintain to reflect, from an

operational perspective, the different

regulatory treatment of IM and VM.

And

given that the total amount of combined IM

and VM exchanged would not exceed the

prescribed MTA, separate MTAs for IM and

VM would not materially increase the

amount of credit risk at a given time. Under

Letter No. 19–25 and this codification, swap

dealers and their counterparties can manage

MTA in an operationally practicable way that

aligns with the market standard.

There Remains Unfinished Business

While I am pleased with the steps the

Commission is taking, there remains

unfinished business in the implementation of

uncleared margin requirements. The report of

the GMAC Margin Subcommittee

recommended several actions, beyond those

that we are adopting, to address the hurdles

associated with the application of uncleared

margin requirements to end-users. Having

been present for the development of the

Dodd-Frank Act, I recall that the concerns

expressed by many lawmakers at the time

focused on the application of the new

requirements to end-users. The unique

challenges with respect to uncleared margin

that caused uneasiness back in 2009–2010

are now much more immediate as the margin

requirements are being phased in to apply to

these end-users. As the calendar turns into

the new year, I look forward to continuing to

work together to address the other

recommendations included in the GMAC

Margin Subcommittee’s report regarding

applying the uncleared margin rules to

financial end-users. The need to do so will

only become more urgent as time marches

on.

Conclusion

To be clear, these changes to the uncleared

margin rules are not a ‘‘roll-back’’ of the

margin requirements that apply today to the

largest financial institutions in their swap

transactions with one another. Rather, they

reflect a thoughtful refinement of our rules to

take account of specific circumstances in

which the rules impose substantial practical

and operational challenges (i.e., they are not

workable) when applied to financial end-

users that are now coming within the scope

of their mandates.

I am very appreciative of the many people

whose efforts have contributed to bringing

this rulemaking to fruition. First, the

members of the GMAC, and especially the

GMAC Margin Subcommittee, who devoted a

tremendous amount of time to provide us

with a high-quality report on complex margin

issues during the turmoil at the start of the

pandemic. Second, Chairman Tarbert and my

fellow Commissioners for working with me

on these important issues. And finally, the

Staff of the Market Participants Division,

whose tireless efforts have enabled us to

advance these initiatives to assure that our

uncleared margin rules are workable for all,

thereby enhancing compliance consistent

with our oversight responsibilities under the

CEA.

Appendix 3—Statement of Commissioner

Dan M. Berkovitz

I. Introduction

I support today’s two final rules that make

tailored amendments to the CFTC’s Margin

Rule.

The Margin Rule requires swap

dealers (‘‘SDs’’) and major swap participants

(‘‘MSPs’’) for which there is no prudential

regulator to post and collect, each business

day, initial and variation margin for

uncleared swap transactions with each

counterparty that is an SD, MSP, or a

financial end user with material swaps

exposure (‘‘MSE’’).

The Margin Rule is a

lynchpin of the Dodd-Frank reforms for

swaps markets, and critical to mitigating

risks in the financial system that might

otherwise arise from uncleared swaps.

support the final rules because they provide

targeted, operational improvements to the

Margin Rule; include backstops to deter any

potential abuse; and are unlikely to increase

risk to the U.S. financial system.

The two final rules address: (1) The

definition of MSE and an alternative method

for calculating initial margin (‘‘MSE and

Initial Margin Final Rule’’); and (2) the

application of the minimum transfer amount

(‘‘MTA’’) for initial and variation margin

(‘‘MTA Final Rule’’). The final rules align

Commission requirements with international

frameworks developed by the Basel

Committee on Banking Supervision and the

International Organization of Securities

Commissions (‘‘BCBS/IOSCO’’),

and

incorporate recommendations made to the

CFTC’s Global Markets Advisory

Committee.

The final rules also build off

existing CFTC staff no-action letters that in

some cases have been in place since 2017,

and that have operated with no apparent

detrimental effects.

II. MSE and Initial Margin Final Rule

The MSE and Initial Margin Final Rule

amends the definition of MSE to align it with

the BCBS/IOSCO framework, including the

method for calculating the average daily

aggregate notional amount (‘‘AANA’’) of

swaps. The final rule provides for

calculations based on the average of the last

business day in each month of a three-month

period. The Commission previously raised

concerns that this method of AANA

calculation could potentially become less

representative of an entity’s true AANA and

swaps exposure, potentially through the use

of ‘‘window dressing’’ to artificially reduce

AANA during the measurement period.

The MSE and Initial Margin Final Rule

includes an important new provision to

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MSE and Initial Margin Final Rule at new

§23.151 (defining ‘‘Material Swaps Exposure’’).

The preamble to the MSE and Initial Margin

Final Rule also notes an analysis by the CFTC’s

Office of the Chief Economist indicating that the

new month-end AANA calculation method captures

substantially the same entities and total number of

entities as the Commission’s previous daily AANA

calculation method. As with any rulemaking, the

Commission is free in the future to periodically

review its data and confirm that the new AANA

calculation method is performing as expected.

7 U.S.C. 6a(c)(2).

MSE and Initial Margin Final Rule at section

II(B).

17 CFR 23.151.

Both aspects of the MTA Final Rule were the

subject of CFTC staff no-action letters issued in

2017 and 2019, respectively.

address this issue. The final rule explicitly

prohibits any ‘‘[a]ctivities not carried out in

the regular course of business and willfully

designed to circumvent calculation at month-

end to evade meeting the definition of

material swaps exposure ....’’

The

addition of this language to the final rule’s

regulatory text will help ensure that CFTC

efforts at international harmonization will

not come at the expense of the safety and

soundness of the U.S. financial system.

thank the Chairman and the CFTC staff for

working with my office to include this

provision.

The MSE and Initial Margin Final Rule will

also allow SDs and MSPs for which there is

no prudential regulator (‘‘Covered Swap

Entities’’ or ‘‘CSEs’’) to rely on the initial

margin calculations of the more sophisticated

counterparties with whom they transact

swaps to manage their risks. This flexibility

is limited to circumstances where a CSE

enters into uncleared swaps with an SD,

MSP, or swap entity to hedge its customer-

facing swaps. This amendment to the

Commission’s existing rules could help

promote liquidity and competition in swaps

markets by increasing choice for end-users

that are CSE customers.

The MSE and Initial Margin Final Rule

provides helpful direction regarding the

scope of hedging swaps for purposes of

relying on a CSE counterparty’s initial

margin calculations. As set forth in the

preamble to the final rule, a hedging swap

must be consistent (although not identical)

with the statutory definition of ‘‘bona fide

hedging transaction or position’’ in CEA

section 4a(c)(2)(B).

The final rule also makes

clear that existing Commission regulations

require a CSE that relies on its counterparty’s

initial margin calculations to also take steps

to ‘‘monitor, identify, and address potential

shortfalls in the amounts of [initial margin]

generated by the counterparty on whose

[initial margin] model the CSE is relying.’’

III. MTA Final Rule

To reduce operational burdens associated

with de minimis margin transfers, the Margin

Rule provides that a CSE is not required to

collect or post margin until the combined

amount of initial margin and variation

margin that is required to be collected or

posted and that has not been collected or

posted with respect to the counterparty

exceeds $500,000—the MTA.

This MTA

level, in part, helps limit the amount of a

counterparty’s uncollateralized, uncleared

swaps exposure and mitigate any systemic

risk arising from such swaps.

The MTA Final Rule addresses the

application of the $500,000 MTA level to a

counterparty’s ‘‘separately managed

accounts,’’ as well as the use of separate

MTAs for initial and variation margin.

The

MTA Final Rule codifies separate treatment

for separately managed accounts and permits

an MTA of $50,000 for each such account of

a counterparty. This approach responds to

practical limits on the ability of asset

managers, for example, to aggregate initial

and variation margin obligations across

multiple separately managed accounts owned

by the same counterparty. The MTA Final

Rule also provides that if certain entities

agree to separate MTAs for initial margin and

variation margin, the respective amounts of

MTA must be reflected in their required

margin documentation.

These new provisions balance concerns

over operational inefficiencies and practical

challenges in the Commission’s MTA rules

against concerns that they may result in the

exchange of less total margin than would be

the case under the Commission’s current

requirements. Comments in response to the

proposed rule noted the difficulties that

would be associated with creating numerous

separately managed accounts solely to evade

the comparatively low $50,000 MTA for

separately managed accounts. The MTA

Final Rule also defines separately managed

account so that the swaps of such account are

not subject to a netting of initial or variation

margin obligations. This potentially provides

further disincentive to create separately

managed accounts solely for the purpose of

evading the $50,000 MTA level for such

accounts.

IV. Conclusion

Mitigating systemic risk to the U.S.

financial system was a primary objective of

the Dodd-Frank Act in 2010, and of

subsequent Commission rulemakings to

implement Dodd-Frank, including the

Margin Rule adopted in 2016. The

Commission must remain committed to the

Margin Rule and vigilant for any large pool

of uncollateralized, uncleared swaps

exposure. Today’s targeted final rules, which

codify existing practices, include embedded

backstops, and provide tailored operational

enhancements to the Margin Rule, are

unlikely to present systemic risks.

I thank staff of the Market Participants

Division for their work on these final rules.

[FR Doc. 2020–27508 Filed 1–22–21; 8:45 am]

BILLING CODE 6351–01–P

DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric

Administration

50 CFR Part 679

[Docket No. 200221–0062; RTID 0648–

XA805]

Fisheries of the Exclusive Economic

Zone Off Alaska; Pacific Cod by

Catcher Vessels Using Trawl Gear in

the Western Regulatory Area of the

Gulf of Alaska

AGENCY

: National Marine Fisheries

Service (NMFS), National Oceanic and

Atmospheric Administration (NOAA),

Commerce.

ACTION

: Temporary rule; modification of

closure.

SUMMARY

: NMFS is opening directed

fishing for Pacific cod by catcher vessels

using trawl gear in the Western

Regulatory Area of the Gulf of Alaska

(GOA). This action is necessary to fully

use the A season allowance of the 2021

total allowable catch (TAC) of Pacific

cod by catcher vessels using trawl gear

in the Western Regulatory Area of the

GOA.

DATES

: Effective 1200 hrs, Alaska local

time (A.l.t.), January 20, 2021, through

1200 hrs, A.l.t., June 10, 2021.

Comments must be received at the

following address no later than 4:30

p.m., A.l.t., February 3, 2021.

ADDRESSES

: Submit your comments,

identified by NOAA–NMFS–2019–0102

by any of the following methods:

•Federal e-Rulemaking Portal: Go to

www.regulations.gov/

#!docketDetail;D=NOAA-NMFS-2019-

0102, click the ‘‘Comment Now!’’ icon,

complete the required fields, and enter

or attach your comments.

•Mail: Submit written comments to

Glenn Merrill, Assistant Regional

Administrator, Sustainable Fisheries

Division, Alaska Region NMFS, Attn:

Records. Mail comments to P.O. Box

21668, Juneau, AK 99802–1668.

Instructions: NMFS may not consider

comments if they are sent by any other

method, to any other address or

individual, or received after the

comment period ends. All comments

received are a part of the public record,

and NMFS will post the comments for

public viewing on www.regulations.gov

without change. All personal identifying

information (e.g., name, address),

confidential business information, or

otherwise sensitive information

submitted voluntarily by the sender will

be publicly accessible. NMFS will

accept anonymous comments (enter

VerDate Sep<11>2014 17:40 Jan 22, 2021 Jkt 253001 PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 E:\FR\FM\25JAR1.SGM 25JAR1

jbell on DSKJLSW7X2PROD with RULES

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Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants

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