Key takeaways

• The Commodity Futures Trading Commission (the “CFTC”) adopted final rules on initial and variation margin requirements for non-cleared swaps (“Covered Swaps”), which requirements apply to swap dealers and major swap participants for which there is no prudential regulator (“Covered Swap Entities”). The CFTC final rules are generally consistent with the margin requirements for non-cleared derivatives adopted in October 2015 by the U.S. federal banking agencies.
• While only the Covered Swap Entities are directly subject to the new rules, all swap market participants who transact Covered Swaps with Covered Swap Entities will be affected as they will be required to post and/or collect margin in accordance with the new margin requirements when transacting with a Covered Swap Entity. 
• The CFTC also adopted interim final rules to exempt from the margin requirements of the final rules certain Covered Swaps with non-financial end users and certain other counterparties that qualify for an exception or exemption from mandatory clearing requirement for swaps.