On October 15, 2020, the CFTC approved a final rule extending to September 1, 2022 the final Phase Six deadline for compliance with CFTC initial margin (IM) requirements for uncleared swaps entered into by swap dealers (SDs) and major swap participants (MSPs) for which there is no prudential regulator (CFTC margin rules) with smaller entities not covered by the CFTC's May 28, 2020 interim final rule (May 2020 IFR).

The May 2020 IFR delayed CFTC Phase Five IM compliance from September 1, 2020, to September 1, 2021 in recognition of the challenges faced by the entities as a result of the COVID-19 pandemic (see Legal Update, CFTC Delays Initial Margin (IM) Phase Five Compliance for One Year to September 1, 2021 as a Result of COVID-19).

The final rule delays the CFTC Phase Six IM compliance date for all remaining in-scope uncleared swap portfolios in excess of $8 billion from September 1, 2021 to September 1, 2022 to avoid a logjam of having both Phase Five and Phase Six CFTC IM compliance fall on the same date.

Note that the CFTC has also proposed a change to the counting period for Phase Six IM compliance (see Legal Update, CFTC Proposes Margin Amendments to Align with BCBS/IOSCO and Adjust Minimum Transfer Amounts (MTAs): Alignment of CFTC Margin Rules with BCBS/IOSCO Framework).

For further details on Phases Five and Six, see Practice Note, US Derivatives Regulation: Margin Collection and Exchange Requirements for Uncleared Swaps: Compliance Dates for Prudential and CFTC Initial Margin (IM) Requirements.