Finra exempts smaller firms from TBA margin rules

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By Matthew Scully
11 Jul 2014

The US Financial Industry Regulatory Authority voted on Thursday to impose margin requirements on transactions of mortgage-backed securities, but included key exemptions that will make it easier for smaller firms to comply.

Counterparties in the 'To Be Announced' (TBA) market, which sees $186bn in daily traded volume, will be required to post a 2% of a transaction’s value as maintenance and variation margin. The final decision also included two exemptions that will benefit small accounts.

“The first exemption,” said board ...

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