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COVID-19 Regulatory update no. 3

Welcome to the third in our weekly COVID-19 Regulatory update series. Another significant week for COVID-19 financial regulation- BCBS announced the deferral of Basel III implementation and on Friday evening issued a 1 year extension to the IM Phases 5 and 6 deadlines.

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IM deferred by 1 year

On 3 April 2020 BCBS and IOSCO announced a one year extension to IM Phases 5 and 6. Accordingly, the revised Phase 5 deadline is 1 September 2021, Phase 6 is 1 September 2022. AANA calculation periods for each phase will also be extended by one year.   AANA Period (EU) Threshold Deadline Phase 5 […]

COVID-19 Regulatory update

In order to manage the impact from COVID-19, regulators are announcing a number of measures and reliefs to help firms deal with the disruption caused by the virus. Last week, we did a preliminary post with some of the steps that regulatory bodies have taken with regards to wholesale financial regulation, and the table below […]

ISDA appeals IM

ISDA and 21 other Trade Associations (collectively “ISDA”) yesterday submitted a letter to regulators requesting a suspension of the IM Phase 5 and 6 deadlines, pending COVID-19 clarity. The letter also suggests that when and if new deadlines are set, “sufficient lead time be provided”.  The letter is supplemented by an article by Scott O’Malia, […]

EC says IM full speed ahead

Risk magazine (subscription) reports an email statement from Patrick Pearson, head of the financial market infrastructure and derivatives unit at the EC, that there are no plans to delay Phases 5 and 6 of IM. “The amendments to the current regulatory technical standard on margins to implement the internationally agreed timeframe are currently in the […]

Coronavirus- Initial Regulatory Responses

As the industry prepares to deal with the unprecedented and rapidly changing problems posed by the COVID-19 pandemic, a number of regulators have taken action. ESMA The European Securities and Markets Authority (ESMA) has taken measures to relieve the reporting burden on counterparties that are subject to the Securities Finance Transactions Regulation (SFTR). The 13 […]

OSFI verifies their IM Delay requirements

The spread of COVID-19 has not stopped the OSFI of Canada from verifying their IM arrangements. As was previously covered, the OSFI of Canada has issued a revised version of its Margin Requirements for Non-Centrally Cleared Derivatives. Since BCBS’s March 2019 announcement, the OSFI was the first regulator to announce that they would be extending […]

CFTC keeps on KISS-ing

The CFTC is back with another proposal to refine the spirit of Dodd-Frank Regulations and amend real-time public reporting regulations. Chairman Tarbert opened his speech by stating that data is ‘the lifeblood of our markets’ and went on to essentially outline the CFTC’s new vision for how this this data should be delayed. Under Commodity […]

CFTC confirms Libor Relief

At the request of the ARRC, the CFTC has today announced comprehensive relief to swap dealers and other market participants as they make the transition from swaps that reference LIBOR and other “Impaired Reference Rates” to those that reference alternative benchmarks. The relief comprises no-action letters from each of the Commission’s main divisions, broadly covering […]

EU finally confirms intent to IM mitigate

In the Regulatory equivalent of a pair of socks- necessary, entirely expected, but still welcome; the ESAs have today delivered an early Christmas present to Heads of Compliance in a draft Revised RTS echoing the July 2019 BCBS/IOSCO IM mitigation. Initial Margin          A revised article 36(1) instantiates the BCBS/IOSCO recommended bifurcation into two remaining IM […]

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