Regulatory Notice 11-31

Interim Pilot Program on Margin Requirements for Credit Default Swaps

Effective Date: July 16, 2011

Executive Summary

FINRA Rule 4240 established an interim pilot program (the Interim Pilot Program) with respect to margin requirements for certain transactions in credit default swaps (CDS). This Notice addresses FINRA approval of margin methodologies used by clearing agencies or derivatives clearing organizations for purposes of Rule 4240.


FINRA has extended the Interim Pilot Program to January 17, 2012.


The text of FINRA Rule 4240 is available in the online FINRA Manual.


Questions concerning this Notice should be directed to:

  • Rudolph R. Verra, Managing Director, Risk Oversight and Operational Regulation, at (646) 315-8811;
  • Glen Garofalo, Director, Credit Regulation, at (646) 315-8464;
  • Steve Yannolo, Project Manager, Credit Regulation, at (646) 315-8621; or
  • Adam H. Arkel, Assistant General Counsel, Office of General Counsel, at (202) 728-6961


This Notice was updated 07/18/11 to reflect approval of the use of an additional margin methodology for purposes of FINRA Rule 4240.