As the UMR Phase 4 and 5 deadlines approach, you may have a lot of questions about if and how you are impacted by UMR. Below are some of the common questions we receive.
No. Initial margin rules apply to any firm who is in-scope of their local margin rules and has an AANA during the relevant observation period for each year at or above the minimum threshold. If your AANA is above the threshold, your firm will be subject to Initial margin rules. For further detail on the UMR timeline & How & When AANA is calculated, see cmegroup.com/umr respective sections.
The observation period for Phase 5 (Sep 2020 deadline) for U.S. covered entities is as follows: June, July and August 2019.
For firms covered by jurisdictions, in the rest of world the Phase 5 observation period is as follows: March, April and May 2020.
No, as with the previous question, it depends on your threshold.
No, whether you will be in-scope is based on your AANA, which is calculated on open gross notional outstanding of non-centrally cleared derivatives.
Hedging tools are not exempt from derivatives used in the AANA calculation, which in turn is used to determine whether a firm is in-scope for UMR. See the tables in “Who and What Is In Scope for UMR?” section.
It may. Please reach out to your prime broker.
CME Group offers several solutions to help you overcome UMR challenges, across bilateral and cleared markets. Explore our comprehensive offerings here.
Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Swaps trading should only be undertaken by investors who are Eligible Contract Participants (ECPs) within the meaning of Section 1a(18) of the Commodity Exchange Act. Futures and swaps each are leveraged investments and, because only a percentage of a contract’s value is required to trade, it is possible to lose more than the amount of money deposited for either a futures or swaps position. Therefore, traders should only use funds that they can afford to lose without affecting their lifestyles and only a portion of those funds should be devoted to any one trade because traders cannot expect to profit on every trade.
CME Group, the Globe Logo, CME, Globex, E-Mini, CME Direct, CME DataMine and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc. CBOT is a trademark of the Board of Trade of the City of Chicago, Inc. NYMEX is a trademark of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners.
The information within this communication has been compiled by CME Group for general purposes only. CME Group assumes no responsibility for any errors or omissions. Additionally, all examples in this communication are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. All matters pertaining to rules and specifications herein are made subject to and superseded by official CME, CBOT, NYMEX and COMEX rules. Current rules should be consulted in all cases concerning contract specifications.
Copyright © 2019 CME Group Inc. All rights reserved
As the world’s leading derivatives marketplace, CME Group is where the world comes to manage risk. Comprised of four exchanges - CME, CBOT, NYMEX and COMEX - we offer the widest range of global benchmark products across all major asset classes, helping businesses everywhere mitigate the myriad of risks they face in today's uncertain global economy.
Follow us for global economic and financial news.