Skip to content

EP adopts non-cleared margin rules- market quietly panics

As previewed by its own ECON committee, the European Parliament yesterday adopted the “final” draft of the long-awaited non-cleared margin rules under EMIR. The uncharacteristic fast-tracking has created the ironic situation in which market participants are now lobbying the Council to delay their adoption of the rules in order to avoid entry into application during […]

The ISDA 2016 Variation Margin Protocol – A Step Too Far?

Introduction On 16 August 2016, ISDA published the “2016 Variation Margin Protocol” (the “VM Protocol”), designed to assist counterparties in amending CSA documentation so as to comply with Working Group on Margin Requirements (WGMR) rules as implemented locally by: The US “Prudential Regulators”; The CFTC; The Financial Services Agency of Japan; and The Canadian Office […]

EU non-cleared fog begins to clear

On 28 July 2016 the EC published a letter to the Joint Committee of the European Supervisory Authorities (ESAs), stating that it will endorse a revised text [1] of the RTS on risk mitigation techniques for non-cleared OTC derivatives Article 11(15) of EMIR. The market has been on tenterhooks since 9 June 2016 when the Commission announced that it would […]

ISDA Publishes WGMR Compliant VM CSAs

Introduction On 14 April 2016 ISDA published the New York law “2016 Credit Support Annex for Variation Margin (VM)” (the “NY-law VM CSA”).  Subsequently, on 29 April 2016 it published the English law “2016 VM Credit Support Annex for Variation Margin (VM)” (the “English-law VM CSA” and together with the NY-law VM CSA, the “VM […]

Another day- another change to the CSA

In yet another development driven by the remorseless exigencies of Regulatory Capital requirements, banks are looking to move currently clearing-exempted clients to cash-only CSAs. In order to bridge the pricing-gap between cash and non-cash collateralised swaps, banks are offering insurers and pension funds the option to post securities with an automatic switch to cash at […]

Cross-currency collateral ousted from SCSA 2

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 […]

Collateral Managers Weep, Lawyers Rejoice: EU Consults on non-cleared OTC derivatives

On 14 April 2014, the Joint Committee of the European Supervisory Authorities (ESAs)[1] published a consultation paper on draft regulatory technical standards (RTS) on risk-mitigation techniques for OTC derivative contracts not cleared by a CCP under Article 11(15) of EMIR.  The consultation paper represents the beginning of the EU’s legislative process to implement the Basel […]

Margin Requirements for OTC Derivatives – Regulators Listen but do they Hear?

Introduction On 2 September 2013, the Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”) published their long-awaited final policy document dealing with “Margin requirements for non-centrally cleared derivatives”. Scope Subject to certain exemptions discussed below, the final rules apply to financial firms and systemically important non-financial entities (“Covered Entities”) […]

FX Forwards and Swaps to be initial margin free

The WGMR[1] has told Risk magazine that their rules for non-centrally cleared derivatives will be published within weeks. A member of the working group said, “Publication is expected by the end of the month. A specific treatment [i.e. an exemption] for forex swaps and forwards is indeed likely”. Market participants have lobbied hard over the […]

IOSCO publishes responses to consultation on margin requirements for non-cleared derivatives

On 2 April 2013, the International Organization of Securities Commissions (IOSCO) published a list of the responses it received to its consultation document on margin requirements for non-centrally cleared derivatives, published on 15 February 2013, a more detailed summary of which can be found here.  Two notable responses were received from ISDA (primarily for the […]

Press enter or esc to cancel