The SEC and CFTC are reviewing cross-margin rules to improve coordination across securities and derivatives markets. Regulators seek feedback on collateral, risk management, clearing systems,
U.S. market regulators have opened a new review that could change how margin requirements work across multiple asset classes. The Securities and Exchange Commission and the Commodity Futures Trading Commission jointly requested public feedback on portfolio margining frameworks, seeking input on securities, futures, swaps, and related products. The consultation begins ahead of a 60-day comment period following publication in the Federal Register.
https://twitter.com/ChairmanSelig/status/2070512712359047659?s=20According to the SEC and CFTC, the request aims to evaluate whether closer alignment between regulatory frameworks could improve market efficiency. The agencies also want to assess whether coordination could reduce market fragmentation while maintaining customer protections.
As part of the review, regulators are examining how portfolio margining currently operates across different markets. They are also looking at how existing rules affect participants that operate across several asset classes.
SEC Chairman Paul Atkins said overlapping regulatory structures should not limit efficiency or innovation. He added that cross-margining could help unlock liquidity that remains separated across different accounts.
With that objective outlined, regulators are now gathering views from market participants.
The consultation covers several areas tied to market operations and risk controls. Notably, the agencies are seeking feedback on current portfolio margining models and industry practices.
They also want comments on customer protection measures and cross-product margin offsets. In addition, the review includes questions about collateral treatment, capital requirements, and asset segregation.
Risk management frameworks form another major part of the consultation. The agencies are also examining margin methodologies used throughout securities and derivatives markets. From there, the review extends to clearing infrastructure.
The SEC and CFTC are requesting feedback on the role of clearing agencies and derivatives clearing organizations. They are also examining operational and technical challenges tied to implementation.
Meanwhile, regulators want industry participants to address potential effects on market liquidity and competition. Those responses will help both agencies evaluate possible areas for future coordination.
CFTC Chairman Mike Selig said stronger cooperation between the agencies could unlock unused capital while maintaining market protections. He added that stakeholder feedback will play a role in shaping future policy discussions.
The public comment period will remain open for 60 days after the request appears in the Federal Register.
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