ISDA is currently drafting a protocol designed to allow market participants to amend the terms of bilateral (not unilateral) credit support documentation to account for negative interest amounts on cash collateral.  The protocol will exclude those collateral agreements which already: specify an alternative to the payment of an “Interest Amount”; detail arrangements for interest to […]

Despite industry hand-wringing and earlier indications of flexibility, the CFTC yesterday signalled that it sees little prospect of relaxing its long-standing proposed margin rules.  Current practice allows a broker to use one client’s excess margin to cover the shortfall in another’s, allowing clients up to three days to meet a margin call. The proposed rule […]

On 18-19 June 2013, the Board of the International Organization of Securities Commissions (IOSCO) met in Montreal.  Following this meeting, a press release was published on 1 July 2013 confirming that: the “Principles for margin requirements for non-centrally cleared derivatives” will be finalised in July, following discussion of a number of outstanding issues, including whether […]

…but refuses to take a standing count in the fight over initial margin. This is a link to an article in Risk Magazine which confirms that, despite its continued in-principle opposition to the initial margin proposals contained within the Working Group on Margin Requirement’s (WGMR) consultation paper on “Margin requirements for non-centrally cleared derivatives”, ISDA […]

On 12 April 2013, the International Swaps and Derivatives Association (ISDA) published a Letter on Margin Requirements for Non-Centrally Cleared Derivatives written jointly with the Institute of International Finance (IIF), the Association of Financial Markets in Europe (AFME) and the Securities Industry and Financial Markets Association (SIFMA). The letter is addressed to the Basel Committee […]

Here is a link to an interesting article in Risk Magazine regarding the potential impact of the “near final” BCBS/IOSCO margin rules for non-cleared derivatives (the “BCBS/IOSCO Rules”) on the adoption of ISDA’s standard credit support annex (SCSA). The BCBS/IOSCO consultation paper which includes the “near final” rules was published on 15 February 2013 (see […]

Risk Magazine is reporting that the International Organization of Securities Commissions (IOSCO) will publish an interim consultation on collateral requirements for non-centrally cleared derivatives within days.  The article states that David Wright, Secretary General of IOSCO, also confirmed IOSCO’s goal to have the standards completed by September 2012.

Any hopes of seeing a global standard with respect to the margining of non-cleared derivatives in the near future seem to have been dashed. Risk reports that the group tasked with drafting the rules, the Working Group on Margining Requirements (a joint working group of the Basel Committee on Banking Supervision and the International Organization […]

Risk Magazine is reporting that the European Securities and Markets Authority (ESMA) has confirmed that OTC derivatives trades executed before the relevant EMIR regulatory technical standards come into force will not be subject to rules regarding the posting of initial margin. Article 11(3) of EMIR requires financial counterparty to have procedures in place governing the […]