Double standards: CFTC margin rules redefine key concepts
Recently de-guaranteed foreign affiliates of US banks face having to comply with US swap rules under new proposals, but only when posting margin on non-cleared swaps. In all other respects, earlier guidance will let them escape. How this will work in practice no-one really knows
Try to keep up. The foreign office of a US bank is subject to Commodity Futures Trading Commission (CFTC) rules on swaps clearing, execution and reporting, unless it is an affiliate that is not guaranteed by the US parent. These non-guaranteed affiliates (NGAs) and, crucially, their non-US clients are in the clear.
If, however, the NGA is not overseen by one of the US prudential supervisors, its financial results are consolidated with those of its US parent and it is executing a trade with a
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