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NFA Adopts Interpretive Notice on Swap Valuation Disputes

National Futures Association (NFA) has adopted an interpretive notice that standardizes the process for filing swap valuation disputes with NFA. As set forth in the interpretive notice, swap dealers (SDs) generally are required to file with NFA notices of unresolved swap valuation disputes involving initial margin, variation margin and/or transaction or portfolio valuations if the amount in dispute exceeds $20 million. The interpretive notice also requires SDs to amend previously filed notices if the amount in dispute has increased or decreased by at least $20 million. SDs also must terminate previously filed notices when the matters are resolved or the amount in dispute falls below $20 million.

NFA’s interpretive notice also requires SDs to file the notices through WinJammer and standardizes the information that must be included in the notice, including (as applicable) NFA identifier, legal entity identifier (LEI), dispute reportable date, dispute type, dispute termination date, receiver/payer, disputed amount, CSA/netting agreement identifier, counterparty name, counterparty LEI or privacy law identifier, unique swap identifier, base currency notional amount, base currency code, notional value USD equivalent, asset class, and product type.

The interpretive notice will be effective for dispute notices required to be filed on or after January 2, 2018.

NFA’s interpretive notice is available here.

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About this Author

Guy Dempsey Jr., Bank Regulations Legal Specialist, Katten Muchin
Partner

Guy C. Dempsey Jr. concentrates his practice on derivatives and structured products and on bank regulation. He advises clients on derivatives transactions of all types across all asset classes, as well as on the corporate governance, regulatory, collateral, compliance, insolvency and litigation issues associated with such products.

Much of Guy’s work involves helping bank and non-bank clients analyze the details and impact of the Dodd-Frank Act. He maintains deep knowledge of the banking laws and regulations relating to capital markets activities....

212-940-8593
James M. Brady, Katten Muchin Law Firm, Finance Attorney
Associate

James Brady concentrates his practice in financial services matters.

While in law school, James was an editor of the Michigan Journal of International Law. He also served as a judicial intern to the Honorable Stephen J. Markman of the Michigan Supreme Court. http://www.kattenlaw.com/James-Brady

312-902-5362