Sample Dodd-Frank Quarterly Initial Margin Notice for Swap Dealers Published by ISDA® | Practical Law

Sample Dodd-Frank Quarterly Initial Margin Notice for Swap Dealers Published by ISDA® | Practical Law

ISDA released a sample form that may be used by swap dealers and MSPs to report quarterly to a counterparty that has not elected to require initial margin (IM) segregation under CFTC Regulation 23.701.

Sample Dodd-Frank Quarterly Initial Margin Notice for Swap Dealers Published by ISDA®

by Practical Law Finance
Published on 12 May 2014 • USA (National/Federal)
ISDA released a sample form that may be used by swap dealers and MSPs to report quarterly to a counterparty that has not elected to require initial margin (IM) segregation under CFTC Regulation 23.701.
On May 7, 2014, ISDA® released a sample notification for market participants to use in connection with CFTC Regulation 23.701, mandated by Section 724(c) of the Dodd-Frank Act, which requires swap dealers (SDs) and MSPs to notify their non-SD/non-MSP swap counterparties of their right to require segregation of any initial margin collateral posted in connection with uncleared swaps entered into between them (see Practice Note, The Dodd-Frank Act: Derivatives Margin Collateral Rules: Title VII Rules on Segregation of Uncleared Swap Margin Collateral and Legal Update, ISDA Releases Sample Initial Margin Segregation-Rights Notice and FAQs).
CFTC Regulation 23.704 requires that SDs and MSPs notify their non-SD/non-MSP swap counterparties that have not elected segregation under CFTC Regulations 23.702 and 23.703 with a quarterly notice in which the SD/MSP represents that its back office procedures relating to margin and collateral requirements were in compliance during that quarter with respect to "any governing uncleared swap agreement then in effect."
"ISDA" is a registered trademark of the International Swaps and Derivatives Association, Inc. (ISDA). ISDA is not a sponsor of Practical Law and had no part in the development of this resource.