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Hedge Funds Win Collateral Reprieve in SEC Dodd-Frank Shift

Hedge funds and asset managers won relief from Dodd-Frank Act collateral requirements for credit-default swaps under a policy shift disclosed today in letters posted on the U.S. Securities and Exchange Commission’s website.

The letters to banks including JPMorgan Chase & Co. and Goldman Sachs Group Inc. revised a measure released in March that called for some clients to put up double the collateral dealers post for portfolio margin accounts at Atlanta-based IntercontinentalExchange Inc. The banks instead will be able collect collateral from clients according to clearinghouse rules for six months.