Joint Letter to US Regulators on Cash and Money Market Funds as Initial Margin

August 01, 2019



Commodity Futures Trading Commission, Board of Governors of the Federal Reserve System, Department of the Treasury/Office of the Comptroller of the Currency, Farm Credit Administration, Federal Deposit Insurance Corporation, Federal Housing Finance Agency

The International Swaps and Derivatives Association , Managed Funds Association , Securities Industry and Financial Markets Association’s Asset Management Group, Investment Company Institute, Institutional Money Market Funds Association, and Securities Industry and Financial Markets Association submitted a letter on August 1, 2019 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 requirements of the Margin and Capital Requirements for Covered Swap Entities  and the Margin Requirements for Uncleared Swaps for Swap Dealers and Major Swap Participants. Specifically, the associations 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. The associations also request that the US prudential regulators permit substituted compliance with EU margin rules.