6860 Federal Register / Vol. 86, No. 14 / Monday, January 25, 2021 / Rules and Regulations 

7MSE and Initial Margin Final Rule at new 

§ 23.151 (defining ‘‘Material Swaps Exposure’’). 

8The preamble to the MSE and Initial Margin 

Final Rule also notes an analysis by the CFTC’s 

Office of the Chief Economist indicating that the 

new month-end AANA calculation method captures 

substantially the same entities and total number of 

entities as the Commission’s previous daily AANA 

calculation method. As with any rulemaking, the 

Commission is free in the future to periodically 

review its data and confirm that the new AANA 

calculation method is performing as expected. 

9 7 U.S.C. 6a(c)(2). 

10MSE and Initial Margin Final Rule at section 

II(B). 

11 17 CFR 23.151. 

12Both aspects of the MTA Final Rule were the 

subject of CFTC staff no-action letters issued in 

2017 and 2019, respectively. 

address this issue. The final rule explicitly 

prohibits any ‘‘[a]ctivities not carried out in 

the regular course of business and willfully 

designed to circumvent calculation at monthend to evade meeting the definition of 

material swaps exposure . . . .’’ 7 The 

addition of this language to the final rule’s 

regulatory text will help ensure that CFTC 

efforts at international harmonization will 

not come at the expense of the safety and 

soundness of the U.S. financial system.8 I 

thank the Chairman and the CFTC staff for 

working with my office to include this 

provision. 

The MSE and Initial Margin Final Rule will 

also allow SDs and MSPs for which there is 

no prudential regulator (‘‘Covered Swap 

Entities’’ or ‘‘CSEs’’) to rely on the initial 

margin calculations of the more sophisticated 

counterparties with whom they transact 

swaps to manage their risks. This flexibility 

is limited to circumstances where a CSE 

enters into uncleared swaps with an SD, 

MSP, or swap entity to hedge its customerfacing swaps. This amendment to the 

Commission’s existing rules could help 

promote liquidity and competition in swaps 

markets by increasing choice for end-users 

that are CSE customers. 

The MSE and Initial Margin Final Rule 

provides helpful direction regarding the 

scope of hedging swaps for purposes of 

relying on a CSE counterparty’s initial 

margin calculations. As set forth in the 

preamble to the final rule, a hedging swap 

must be consistent (although not identical) 

with the statutory definition of ‘‘bona fide 

hedging transaction or position’’ in CEA 

section 4a(c)(2)(B).9 The final rule also makes 

clear that existing Commission regulations 

require a CSE that relies on its counterparty’s 

initial margin calculations to also take steps 

to ‘‘monitor, identify, and address potential 

shortfalls in the amounts of [initial margin] 

generated by the counterparty on whose 

[initial margin] model the CSE is relying.’’ 10

III. MTA Final Rule 

To reduce operational burdens associated 

with de minimis margin transfers, the Margin 

Rule provides that a CSE is not required to 

collect or post margin until the combined 

amount of initial margin and variation 

margin that is required to be collected or 

posted and that has not been collected or 

posted with respect to the counterparty 

exceeds $500,000—the MTA.11 This MTA 

level, in part, helps limit the amount of a 

counterparty’s uncollateralized, uncleared 

swaps exposure and mitigate any systemic 

risk arising from such swaps. 

The MTA Final Rule addresses the 

application of the $500,000 MTA level to a 

counterparty’s ‘‘separately managed 

accounts,’’ as well as the use of separate 

MTAs for initial and variation margin.12 The 

MTA Final Rule codifies separate treatment 

for separately managed accounts and permits 

an MTA of $50,000 for each such account of 

a counterparty. This approach responds to 

practical limits on the ability of asset 

managers, for example, to aggregate initial 

and variation margin obligations across 

multiple separately managed accounts owned 

by the same counterparty. The MTA Final 

Rule also provides that if certain entities 

agree to separate MTAs for initial margin and 

variation margin, the respective amounts of 

MTA must be reflected in their required 

margin documentation. 

These new provisions balance concerns 

over operational inefficiencies and practical 

challenges in the Commission’s MTA rules 

against concerns that they may result in the 

exchange of less total margin than would be 

the case under the Commission’s current 

requirements. Comments in response to the 

proposed rule noted the difficulties that 

would be associated with creating numerous 

separately managed accounts solely to evade 

the comparatively low $50,000 MTA for 

separately managed accounts. The MTA 

Final Rule also defines separately managed 

account so that the swaps of such account are 

not subject to a netting of initial or variation 

margin obligations. This potentially provides 

further disincentive to create separately 

managed accounts solely for the purpose of 

evading the $50,000 MTA level for such 

accounts. 

IV. Conclusion 

Mitigating systemic risk to the U.S. 

financial system was a primary objective of 

the Dodd-Frank Act in 2010, and of 

subsequent Commission rulemakings to 

implement Dodd-Frank, including the 

Margin Rule adopted in 2016. The 

Commission must remain committed to the 

Margin Rule and vigilant for any large pool 

of uncollateralized, uncleared swaps 

exposure. Today’s targeted final rules, which 

codify existing practices, include embedded 

backstops, and provide tailored operational 

enhancements to the Margin Rule, are 

unlikely to present systemic risks. 

I thank staff of the Market Participants 

Division for their work on these final rules. 

[FR Doc. 2020–27508 Filed 1–22–21; 8:45 am] 

BILLING CODE 6351–01–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

50 CFR Part 679 

[Docket No. 200221–0062; RTID 0648– 

XA805] 

Fisheries of the Exclusive Economic 

Zone Off Alaska; Pacific Cod by 

Catcher Vessels Using Trawl Gear in 

the Western Regulatory Area of the 

Gulf of Alaska 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Temporary rule; modification of 

closure. 

SUMMARY: NMFS is opening directed 

fishing for Pacific cod by catcher vessels 

using trawl gear in the Western 

Regulatory Area of the Gulf of Alaska 

(GOA). This action is necessary to fully 

use the A season allowance of the 2021 

total allowable catch (TAC) of Pacific 

cod by catcher vessels using trawl gear 

in the Western Regulatory Area of the 

GOA. 

DATES: Effective 1200 hrs, Alaska local 

time (A.l.t.), January 20, 2021, through 

1200 hrs, A.l.t., June 10, 2021. 

Comments must be received at the 

following address no later than 4:30 

p.m., A.l.t., February 3, 2021. 

ADDRESSES: Submit your comments, 

identified by NOAA–NMFS–2019–0102 

by any of the following methods: 

• Federal e-Rulemaking Portal: Go to 

www.regulations.gov/ 

#!docketDetail;D=NOAA-NMFS-2019- 

0102, click the ‘‘Comment Now!’’ icon, 

complete the required fields, and enter 

or attach your comments. 

• Mail: Submit written comments to 

Glenn Merrill, Assistant Regional 

Administrator, Sustainable Fisheries 

Division, Alaska Region NMFS, Attn: 

Records. Mail comments to P.O. Box 

21668, Juneau, AK 99802–1668. 

Instructions: NMFS may not consider 

comments if they are sent by any other 

method, to any other address or 

individual, or received after the 

comment period ends. All comments 

received are a part of the public record, 

and NMFS will post the comments for 

public viewing on www.regulations.gov 

without change. All personal identifying 

information (e.g., name, address), 

confidential business information, or 

otherwise sensitive information 

submitted voluntarily by the sender will 

be publicly accessible. NMFS will 

accept anonymous comments (enter 


jbell on DSKJLSW7X2PROD with RULES
Federal Register / Vol. 86, No. 14 / Monday, January 25, 2021 / Rules and Regulations 6861 

‘‘N/A’’ in the required fields if you wish 

to remain anonymous). 

FOR FURTHER INFORMATION CONTACT: 

Krista Milani, 907–581–2062. 

SUPPLEMENTARY INFORMATION: NMFS 

manages the groundfish fishery in the 

GOA exclusive economic zone 

according to the Fishery Management 

Plan for Groundfish of the Gulf of 

Alaska (FMP) prepared by the North 

Pacific Fishery Management Council 

under authority of the MagnusonStevens Fishery Conservation and 

Management Act. Regulations governing 

fishing by U.S. vessels in accordance 

with the FMP appear at subpart H of 50 

CFR part 600 and 50 CFR part 679. 

The A season allowance of the 2021 

Pacific cod TAC apportioned to catcher 

vessels using trawl gear in the Western 

Regulatory Area of the GOA is 1,701 

metric tons (mt) as established by the 

final 2020 and 2021 harvest 

specifications for groundfish in the GOA 

(85 FR 13802, March 10, 2020) and 

inseason adjustment (85 FR 83834, 

December 23, 2020). 

NMFS closed directed fishing for 

Pacific cod TAC apportioned to catcher 

vessels using trawl gear in the Western 

Regulatory Area of the GOA under 

§ 679.20(d)(1)(iii) on January 20, 2021 

(85 FR 13802, March 10, 2020). 

As of January 20, 2021, NMFS has 

determined that approximately 1,701 

metric tons (mt) remain of the Pacific 

cod TAC apportioned to catcher vessels 

using trawl gear in the Western 

Regulatory Area of the GOA. Therefore, 

in accordance with § 679.25(a)(1)(i), 

(a)(2)(i)(C), and (a)(2)(iii)(D), and to fully 

utilize the A season allowance of the 

2021 TAC of Pacific apportioned to 

catcher vessels using trawl gear in the 

Western Regulatory Area of the GOA, 

NMFS is terminating the previous 

closure and is reopening directed 

fishing for Pacific cod apportioned to 

catcher vessels using trawl gear in the 

Western Regulatory Area of the GOA, 

effective 1200 hours, A.l.t., January 20, 

2021. 

The Administrator, Alaska Region 

(Regional Administrator) considered the 

following factors in reaching this 

decision: (1) The catch of Pacific cod 

apportioned to catcher vessels using 

trawl gear in the Western Regulatory 

Area of the GOA and, (2) the harvest 

capacity and stated intent on future 

harvesting patterns of vessels in 

participating in this fishery. 

Classification 

NMFS issues this action pursuant to 

section 305(d) of the Magnuson-Stevens 

Act. This action is required by 50 CFR 

part 679, which was issued pursuant to 

section 304(b), and is exempt from 

review under Executive Order 12866. 

Pursuant to 5 U.S.C. 553(b)(B), there 

is good cause to waive prior notice and 

an opportunity for public comment on 

this action, as notice and comment 

would be impracticable and contrary to 

the public interest, as it would prevent 

NMFS from responding to the most 

recent fisheries data in a timely fashion 

and would delay the opening of Pacific 

cod by catcher vessels using trawl gear 

in the Western Regulatory Area of the 

GOA. NMFS was unable to publish a 

notice providing time for public 

comment because the most recent, 

relevant data only became available as 

of January 14, 2021. 

Authority: 16 U.S.C. 1801 et seq. 

Dated: January 15, 2021. 

Kelly Denit, 

Director, Office of Sustainable Fisheries, 

National Marine Fisheries Service. 

[FR Doc. 2021–01434 Filed 1–19–21; 4:15 pm] 

BILLING CODE 3510–22–P 


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