SIFMA provided comments to multiple agencies to inform them of a forthcoming change in market practice for cleared derivatives. Specifically, central clearing counterparties (CCPs) have been working with other market participants (including U.S. and European clearing member firms, law firms and accounting firms) to amend or clarify their terms, rules, and procedures to determine circumstances under which the payment of variation margin (VM) for over-the-counter (OTC) derivatives that are cleared through CCPs constitutes settlement of the exposure, as opposed to collateralization. While the status of implementation of these changes varies across CCPs and clearing member firms, SIFMA wanted to make you these agencies aware of the regulatory capital consequences – resulting from the regulatory capital framework’s recognition of settlement as exposure-reducing – about which clearing member firms may notify their supervisors in coming months.