Variation Settlement Law and Legal Definition

According to 17 CFR 41.43 [Title 17 -- Commodity and Securities Exchanges; Chapter I -- Commodity Futures Trading Commission; Part 41 -- Security Futures Products; Subpart E -- Customer Accounts and Margin Requirements], variation settlement means “any credit or debit to a customer account, made on a daily or intraday basis, for the purpose of marking to market a security future or any other contract that is:

(i) Issued by a clearing agency that is registered under section 17A of the Exchange Act or cleared and guaranteed by a derivatives clearing organization that is registered under section 5b of the Act; and

(ii) Traded on or subject to the rules of a self-regulatory authority.”