The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission issued a joint request for comment on potential ways to further implement and harmonize portfolio margining and cross-margining across securities, security-based swaps, futures, swaps and related positions. The review is aimed at whether greater alignment of the two agencies’ frameworks could permit more recognition of offsetting exposures across products and account types, improving margin and collateral efficiency while remaining consistent with customer protection and other statutory requirements. The request reflects the agencies’ view that current rules can require related positions to be held in separate accounts under different margin regimes, which can limit netting and raise capital or liquidity demands. Input is sought on existing portfolio margining models and current market practices, possible expansion by clearing agencies and derivatives clearing organizations, treatment of cleared and uncleared swaps and security-based swaps, eligible account types, customer protection, segregation and bankruptcy treatment, capital and collateral treatment, risk management and margin methodologies, operational implementation, and effects on liquidity and competition. The agencies also asked for empirical data and quantitative analysis on margin efficiency, collateral usage, liquidity effects, operational costs and risk management outcomes. Comments are due within 60 days after publication in the Federal Register.

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