ISDA Publishes IM Segregation Right Notice

On 27 March 2014, ISDA published its CFTC IM Segregation Right Notice, designed to assist compliance with CFTC rule 23.701 which requires swap dealers and major swap counterparties to notify their counterparties of their right to require the segregation of initial margin posted as collateral in relation to uncleared swap transactions (see this blog post for more detail and background).  The notice is published together with an FAQ document, designed to assist market participants in receiving and responding to segregation notices.

ISDA has confirmed that there will be no protocol associated with the CFTC IM segregation rules, leaving firms to add this to the long line of matters to be dealt with the matter by way of bilateral outreach.  However, the functionality of ISDA Amend is being upgraded in order to assist with the process for those that use the service – allowing firms to designate collateral contacts, deliver/receive segregation notices and make segregation elections.