CFTC Gives New Funds Three-Year Margin Holiday
Published Date: 7/17/2026
Rule
Summary
Starting August 17, 2026, swap dealers and big swap players get some margin rule relief! New rules say certain new investment funds won’t have to exchange initial margin for up to three years, and more types of money market funds can now count as good collateral. Plus, the rules tweak how much value gets discounted on some assets, making it easier and cheaper to trade uncleared swaps.
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
Three‑Year IM Relief for Seeded Funds
Starting August 17, 2026, certain newly seeded investment funds that meet the rule's conditions (``eligible seeded funds'') need not exchange initial margin (IM) with swap dealers or major swap participants for up to three years from the fund's trading inception date. The rule preserves that IM is required if the seeded fund's individual AANA causes it to exceed the MSE threshold or the $50 million IM threshold during that three‑year period, and uncleared swaps entered with the fund during the three‑year period remain relieved from IM even after the period ends.
Money Market Funds Allowed As IM Collateral
Effective August 17, 2026, the Commission removed the rule disqualifying pooled investment funds (``money market and similar funds'') that use securities lending, repurchase agreements, or similar arrangements from being used as eligible initial margin collateral for uncleared swaps. That change expands the types of fund securities that may qualify as permitted IM collateral under Commission Regulation 23.156.
Haircut Schedule Updated for MMFs
The rule amends the haircut schedule in Commission Regulation 23.156(a)(3) by adding a footnote addressing the haircuts applicable to money market and similar funds, effective August 17, 2026. This changes how much value is deducted (haircuted) when shares of these funds are posted as margin collateral.
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