Ask the Professor - Portfolio Margining - How Will Dodd-Frank Impact its Utilization

Abstract:     
This article analyzes the background and current status of portfolio margining, how it has evolved over the past several years, and how the recent Dodd-Frank Act will impact its utilization and effectiveness. Portfolio margining allows a broker-dealer to analyze a client's total overall portfolio from a risk-based analytical model, establishing the proper minimum initial margin requirements for the entire portfolio applying certain parameters. To be a more effective tool, changes to the U.S. Bankrupcty Code were needed. The Dodd-Frank Act made those legislative changes. It's now up to the regulators to make portfolio margining an even more effective and utilized tool.

Number of Pages in PDF File: 7

Keywords: CFTC, Portfolio Margining, NYSE, Margin, Dodd Frank, Regulation T, SEC, Bankruptcy, Financial Institutions, Brokerage Firms

Accepted Paper Series