Both the SEC and the CFTC have extended the comment periods for proposed rules on the treatment of derivatives margin collateral. Comment periods have been extended for proposed SEC rules on, among other things, the treatment of uncleared security-based swap margin collateral and for proposed CFTC rules on the treatment of customer funds, which is customer margin posted to collateralize futures and commodity options.

The SEC has extended until February 22, 2013 the public comment period for proposed rules on capital, margin and margin collateral segregation requirements for security-based swap dealers (SBSDs) and major security-based swap participants (MSBSPs) under the Securities Exchange Act of 1934 (Exchange Act), as well as amended capital requirements for broker-dealers (see Legal Update, Capital and Margin Rules for Security-based Swap Dealers and Major Security-based Swap Participants Proposed by SEC).

The CFTC has extended until February 15, 2013 the public comment period for proposed rules on enhancing protections for customers and customer funds held by futures commission merchants (FCMs) and derivatives clearing organizations (DCOs). Customer funds are funds posted by customers to collateralize futures and commodity options. The proposed CFTC rules were issued on November 14, 2012. These rules require enhanced customer protections, risk management programs, internal monitoring and controls, capital and liquidity standards, customer disclosures and auditing and examination programs for FCMs (see Legal Update, CFTC: Clearing Banks Must Hold Secured Customer Funds in Separate Account).

Note that while the extension of the CFTC comment period relates to margining rules for certain cleared derivatives products, the SEC rules for which the comment period has been extended relate to the treatment of uncleared security-based swap (SBS) customer collateral of SBSDs and MSBSPs.