Uncleared Margin Rules

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Capital-Efficient Solutions for an Evolving Regulatory Environment

As new uncleared margin rules (UMR) begin to take effect, increasing costs for swap dealers and their customers, CME Group is committed to delivering innovative and capital-efficient products that help clients manage risk and reduce margin and capital costs.

Know When Swap Margin Rules Take Effect

Several regulators have promised some forbearance on enforcement actions against firms that miss the deadline

Compare Costs of Different Approaches

Uncleared swap margin rules will require dealer firms to pay initial margin, but the ultimate impact on the firm’s funding costs and investment costs associated with building and supporting new technology and accounts will depend on the approach used.

Firms may choose to pay the table rate dictated by the final rule or calculate margin by building their own model internally or applying SIMM, an industry model that has not been reviewed or approved by regulators. Alternatively, firms can utilize the experience and existing infrastructure of CME Group.

Change

Build: Internal

Apply: SIMM

Utilize: CME Group

Costs

Funding

Investment

Funding

Investment

Funding

Investment

Initial Margin

Higher

Higher

Higher

High

Lower

Lower

Variation Margin

Neutral

Neutral

Neutral

Neutral

Lower

Lower

Infrastructure

N/A

Higher

N/A

Higher

N/A

Lower

Basel Capital

Higher

N/A

Higher

N/A

Lower

N/A

Save by Choosing the Right Products

View key products to help mitigate increased costs due to uncleared margin rules.

See What the Market is Saying

“With uncleared margin rules coming into greater focus for our clients, Credit Suisse is excited to facilitate voluntary Swaptions clearing at CME Group. Clearing Swaptions enables our clients to obtain the greatest operational and capital efficiencies from clearing, while reducing the risks in their portfolios.”

– John Dabbs, Global Head of Prime Derivatives Services, Credit Suisse


"We have seen a meaningful part of the S&P dividend activity shift from the OTC dividend swap market to the CME-listed SPX dividend futures in recent months. The feedback from our clients has been focused on the benefits of these dividend futures, namely the margin netting versus other CME products, the avoidance of OTC novations on secondary trading and the convenience of electronic access to liquidity for smaller adjustments to their positions."

– Christopher Berthe, Head of Delta One Trading Americas, JP Morgan

Calculate Your Potential Savings

Try CME CORE (Clearing Online Risk Engine), our interactive margin calculator, and evaluate initial margin requirements for all CME Group products.

With CME CORE users can:

  • Execute “what-if” margin analysis on hypothetical portfolios
  • Margin all CME Group futures and options as well as Interest Rate and Credit Default swaps
  • Execute OTC efficiency analysis through additional analytics