With September approaching, this is a good moment to check in on where your firm stands with the Uncleared Margin Rules (UMR) as it relates to CFTC covered swap entities.
With September approaching, this is a good moment to check in on where your firm stands with the Uncleared Margin Rules (UMR) as it relates to CFTC covered swap entities. If your firm's exposure has grown, you may be newly in scope this year. If you're already working through your documentation, there's a clear and manageable path to the deadline. If you haven't yet confirmed your firm's status, now is a good time to find out, so you have the runway you need to get everything in place.
Who's In Scope and By When
For entities under the CFTC's margin regime, the compliance date falls on September 1. Whether your firm is newly in scope depends on your Average Aggregate Notional Amount (AANA), calculated over March, April, and May of this year. Firms whose uncleared OTC derivatives exposure crossed the $8 billion threshold during that window are now subject to UMR.
The $8 billion AANA threshold captures a broad range of firms, including:
Hedge funds, private equity funds, and family offices with meaningful OTC derivatives books, particularly those active in FX forwards, swaps, and other non-cleared products
Asset managers whose consolidated group exposure crosses the threshold, even if no single fund does on its own
Corporates and pension funds with hedging programs large enough to reach the calculation
Smaller institutional entities encountering these requirements for the first time
Because AANA is reassessed annually at the consolidated group level, firms can move in and out of scope from year to year, so it's worth confirming your status even if you weren't in scope last cycle.
What the Deadline Requires
UMR requires in-scope firms to segregate initial margin on covered OTC derivatives. In practice, this means:
Calculating required collateral, typically using ISDA's Standard Initial Margin Model (SIMM)
Establishing a custody relationship, segregating the required initial margin with an independent custodian
Negotiating and executing supporting documentation, including custody arrangements, credit support documents, eligible collateral schedules, and account control agreements
Getting Ahead of September
The documentation process is very manageable when there's time to work through it properly. If your firm is already underway, staying on this timeline should keep you on track for a smooth path to September. If your firm hasn't yet started, or hasn't confirmed whether it's in scope, the next few weeks are the right window to begin: reaching out now still leaves enough time to negotiate the necessary documentation comfortably ahead of the deadline.
How Quadrangle Can Help
Quadrangle manages the end-to-end documentation process that UMR compliance depends on. Our team can:
Negotiate custody, credit support arrangements, and account control agreements on your firm's behalf
Guide your firm through ISDA Create, powered by the CreateIQ platform and related onboarding steps to ensure timely execution and coordination with your custodian
Structure counterparty relationships to support both compliance and operational efficiency
Through our QDS platform, every key term across your UMR-related agreements is tracked, auditable, and easy to access, keeping compliance simple rather than stressful.
Whether you're still confirming if your firm is in scope or ready to begin papering the required agreements, we're here to help.
