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Prudential Regulators do the prudent thing

US’ Prudential Regulators (FDIC, Federal Reserve, FDIC, OCC, FHFA and FCA) have become the latest to issue a proposal for amending Swap Margin Requirements. The CFTC was the first regulator to adopt the BCBS’ mitigation recommendations, staggering the ‘Big Bang’ Phase 5 and 6 thresholds, so it was only a matter of time for the […]

Another week, another regulator falls in line

The latest IM deadline passed at the start of this month without fanfare, and larger firms were able to breathe their fourth sigh of relief. A year from now, the challenge will not be as “easy”. In Phase 4, approximately 35 firms fell in-scope of the €750 bn threshold. Updated numbers for Phase 5 show […]

Margin Xchange…we hardly knew you

Highlander 1986, “There can be only one!” or for a younger generation, “When you play the game of thrones, you win or die”. Risk magazine reports that MarginXchange (MX) has retired from the fray, leaving an open (if depleted) field for its erstwhile rival ISDACreate (IC). MX was established by the triumvirate of Allen & Overy, […]

ISDA Consultation – The results are in…

In May 2019, ISDA launched two consultations: one addressing adjustments to fallback rates if IBORs are permanently discontinued, and another to address the pre-cessation of LIBOR and other IBORs. The operationally imminent cessation of LIBOR can hardly be classified as breaking news. The light shone by the 2008 financial crash fatally exposed the benchmark’s fragility, […]

HKMA latest IM domino to fall

Earlier today, the Hong Kong Monetary Authority announced their intention to adopt the BCBS/IOSCO’s revised implementation schedule. Their updated deadlines are as follows: For target institutions with Non-Cleared OTC derivatives of more than HKD 375 billion the date will be 1 September 2020. For target institutions with Non-Cleared OTC derivatives of more than HKD 60 […]

Singapore and Korea join rush to delay IM

The Korean Regulator, FSS, is the latest regulator to announce that they will adopt the BCBS/IOSCO guidelines for mitigating risk for non-cleared OTC contracts. This decision follows a recent publication by the MAS (Singapore’s regulatory authority) where they stated that they would also use BCBS/IOSCO’s framework for Non-Centrally Cleared Derivatives in determining whether margin requirements […]

ISDA applies further French twist to IM documentation

Last July, ISDA decided to add French and Irish law to our library of Master Agreements in an attempt to prepare for potential Brexit complications. As mentioned in our earlier post, the objective of this is not to undermine English and New York law, but merely to offer an alternative so firms are awarded a […]

IM- the breakdown (averted)

As expected, ISDA have communicated a more granular breakdown of estimates for the likely population of the new IM phases 5 and 6, via relevant working groups. These have been replicated and published by a number of third party firms. Although all the numbers are estimated, there seems to be both a lack of mathematical […]

IM Phase 5 to bifurcate

Confirming recent market rumours, BCBS\IOSCO have today announced their recommendation to stagger IM Phase 5 implementation over a two year period. An adjusted Phase 5 will apply to firms with an AANA equal to or greater than USD\EUR 50bn and less than 750bn. A new Phase 6, from 1 September 2020 to 1 September 2021, […]

The latest on the prospect of IM Phase 5 relief

Were you at the ISDA legal forum held in New York on 11 June?  If so, we’d love to hear from you. Risk Magazine reports that Dawn DeBerry Stump, a CFTC Commissioner, lent her support to calls that US regulators should grant relief to firms which reside below the USD 50 million IM threshold.  At […]