Recital 12

(12)CFTC Regulations applicable to margins for OTC derivative contracts not cleared by a CCP only require the exchange of initial margin with a ‘covered counterparty’ as defined in section 23.151 of the CFTC Regulations. A covered counterparty is a counterparty that is a financial end user with material swaps exposure or a swap entity that enters into a swap with a covered swap entity. According to section 23.150 of the CFTC Regulations, the material swaps exposure is an average daily notional value of non-cleared OTC derivatives that exceeds USD 8 billion (8 000 million), whereas the analogous threshold set out in Article 28 of Commission Delegated Regulation (EU) 2016/2251 ³ is EUR 8 billion (8 000 million). In the Union, the requirement to exchange variation margin does not have a materiality threshold, and applies to all counterparties subject to Article 11(3) of Regulation (EU) No 648/2012. The CFTC Regulations for combined minimum transfer amount of initial and variation margin in the final margin rule is USD 500 000, whereas the related requirement set out in Article 25 of Delegated Regulation (EU) 2016/2251 is EUR 500 000. Taking into account the limited impact due to the difference in currencies, these amounts should be considered equivalent.