A question that has been ignored, until very recently, is how firms will deal with cross-border derivative contracts when the UK leaves the EU in March 2019. Leaving the single market without either EEA membership or a trade agreement covering financial services will result in complications for existing derivative contracts. With approximately £26 trillion of […]

The FCA have today issued their response to the ESAs 24 November FFX announcement. It is brief and is worth reading in full as a masterclass in ironic prevarication and understatement. Highlights below (emboldening is ours): “The amendments to the RTS should become increasingly clear over time and we would expect firms to make their […]

A brief spotlight through the fog swirling around the upcoming obligation to exchange margin on forward foreign exchange. There was a widespread, if only whispered, expectation that a 7/8 November ESMA Board of Supervisors meeting would result in an official announcement of forbearance. While the EU has no equivalent mechanism to the CFTC’s enthusiastic use […]

On 19 October 2017, ESMA published its “first-time overview” of the EU derivatives market – a study of the size of the EU derivatives market based on aggregated data sourced from the 6 EU-authorised trade repositories. The analysis takes the most updated values of all derivatives contracts with open interest at the end of 24 […]

What did we learn? 1 March 2017 – deadline day for ‘big bang’ – has come and gone.  We all breathed a sigh of relief.  Or did we?  Regulators recognised the fact that firms would not be compliant and, in general, counselled the industry to ‘do your best to get it done by 1 September’.  […]

Introduction With VM CSA repapering in full swing over at DRS, this article took a while longer to write than first anticipated.  It has now been two weeks since ISDA published another two supplemental rules exhibits further amending the ISDA 2016 Variation Margin Protocol (the “Protocol”) on 27 January 2017: Supplemental Rules Exhibit for Non-Netting […]

The Final Frontier On 17 November 2016, ISDA published a “Supplemental Rules Exhibit” (the “EMIR Supplement”) to the ISDA 2016 Variation Margin Protocol (the “Protocol”).  The purpose of the EMIR Supplement is to enable adherents to the Protocol to integrate amendments for margin rules for OTC derivatives in order to achieve compliance with EMIR[1] into […]

The FT website is reporting unnamed sources which confirm that Council approval of the EU non-cleared margin rules will be slightly delayed until 21 November. The Council is relatively free from formal procedures for approval and has been the subject of intense, but quiet, lobbying by investment banks keen to avoid the unfortunate coincidence of […]

Today’s Risk magazine quotes a number of unofficial sources who expect the EC to finalise the non-cleared margin RTS at a meeting on 4 October. The adoption would then be published in the OJ late November, entering into force 20 days later and entering into application one month after that.  This projected timeline would result […]