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ISDA to Develop Standard Model for Margining Non-Cleared Trades…

…but refuses to take a standing count in the fight over initial margin.

This is a link to an article in Risk Magazine which confirms that, despite its continued in-principle opposition to the initial margin proposals contained within the Working Group on Margin Requirement’s (WGMR) consultation paper on “Margin requirements for non-centrally cleared derivatives”, ISDA is to develop a “standard industry margin model” (SIMM) for the calculation of initial margin requirements with respect to such trades (see this blog post for more details).

The initiative is an attempt to avoid a proliferation of dealer-specific models and so reduce the potential for dispute over initial margin calculations.  Apparently, the aim is to agree the model by the middle of 2014 in order that it can be approved prior to the introduction of phase 1 of the regulations on 1 January 2015.

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