The BCBS\IOSCO twins confirmed yesterday that the imposition of margin requirements for uncleared swaps will be delayed by nine months. The phase-in schedule for the mandatory posting of initial and variation margin will now begin in September 2016, while still adhering to its four-year schedule, beginning with “the largest, most active and most systemically important […]

OpenGamma, the open source trading and risk analytics platform, have announced a plan to create an industry-wide utility to facilitate compliance with the (eventually) forthcoming rules on the margining of non-cleared trades. Margin calculations will use the standard initial margin model (SIMM), as amended by each individual user, a reference copy of the open source […]

In a recent webcast, ISDA highlighted the impact on portfolios of derivative documentation which will result from its various workstreams designed to facilitate compliance with the Working Group on Margining Requirements’ (WGMR) forthcoming rules on margin for non-centrally cleared derivatives.  It is required listening for anyone with responsibility for derivative documentation, but a summary is […]

On 26 January 2015, ISDA published a position paper on CCP Default Management, Recovery and Continuity: A Proposed Recovery Framework. The proposed framework reiterates the preference for recovery over resolution. Typically, a recovery is led by the CCP itself, while a resolution must be orchestrated by the relevant resolution authority. If the CCP successfully handles its […]

On 7 November 2014, ISDA published version 1.0 of its “Minimum Standards for the Future State of Margin Workflow” (the “Standards”), a working document designed to support practical implementation of the BCBS-IOSCO margin requirements for Non-Centrally Cleared Derivatives and the draft EU Regulatory Technical Standard on Risk-Mitigation Techniques for OTC-Derivatives Contracts not Cleared by a […]

On 6 November 2014, ISDA released the 2014 “Standard” Credit Support Annex, available as always under English law or New York law. This new CSA is meant to coexist with the legacy 1994 CSA and the already out-of-fashion 2013 CSA published only a year ago. What was presented as a tour de force in the […]

It is increasingly certain that G-SIFIs will relinquish their early termination rights against each other via an ISDA Protocol this autumn. Adherence to the Protocol, which is yet to be released, would only be open for adherence by G-SIFIs. G-SIFIs first In the FSB’s view, early termination rights linked to entry into resolution of G-SIFIs […]

The High Court in the UK[1] recently clarified important parameters of the Market Quotation process under the 1992 ISDA Master Agreement. It is now established that quotations must be obtained on or after the Early Termination Date and that “live” quotes must be obtained. Backdated or indicative quotes are definitely unacceptable. These questions had remained […]

The ISDA Protocol on suspension of early termination rights is likely to be released in September, two months earlier than expected. Only G-SIFIs trading with other G-SIFIs would be covered initially, reflecting the less than enthusiastic reaction of other market participants to give away their early termination rights for the sake of reducing systemic risk. […]