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HKMA latest IM domino to fall

Earlier today, the Hong Kong Monetary Authority announced their intention to adopt the BCBS/IOSCO’s revised implementation schedule. Their updated deadlines are as follows: For target institutions with Non-Cleared OTC derivatives of more than HKD 375 billion the date will be 1 September 2020. For target institutions with Non-Cleared OTC derivatives of more than HKD 60 […]

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Singapore and Korea join rush to delay IM

The Korean Regulator, FSS, is the latest regulator to announce that they will adopt the BCBS/IOSCO guidelines for mitigating risk for non-cleared OTC contracts. This decision follows a recent publication by the MAS (Singapore’s regulatory authority) where they stated that they would also use BCBS/IOSCO’s framework for Non-Centrally Cleared Derivatives in determining whether margin requirements […]

ISDA Applies Further French Twist to IM Documentation

Last July, ISDA decided to add French and Irish law to our library of Master Agreements in an attempt to prepare for potential Brexit complications. As mentioned in our earlier post, the objective of this is not to undermine English and New York law, but merely to offer an alternative so firms are awarded a […]

Senior Managers School Report – ‘Could do better’

The FCA’s recently published Stocktake Report reviewing the implementation of the Senior Managers and Certification Regime (SM&CR) is a polite criticism of senior managers and their superiors in the banking sector. The report consisted of interviews with trade associations, Banking Standards Board, FCA and the PRA to understand how SM&CR has been implemented since it […]

IM- the breakdown (averted)

As expected, ISDA have communicated a more granular breakdown of estimates for the likely population of the new IM phases 5 and 6, via relevant working groups. These have been replicated and published by a number of third party firms. Although all the numbers are estimated, there seems to be both a lack of mathematical […]

IM Phase 5 to bifurcate

Confirming recent market rumours, BCBS\IOSCO have today announced their recommendation to stagger IM Phase 5 implementation over a two year period. An adjusted Phase 5 will apply to firms with an AANA equal to or greater than USD\EUR 50bn and less than 750bn. A new Phase 6, from 1 September 2020 to 1 September 2021, […]

Phase 5 mitigation mitigated

Trailing in the wake of their northern neighbours, the CFTC has today issued a Staff Advisory confirming that there is no requirement for covered swap entities (CSEs) to put IM documentation and custody arrangements in place before the $50m threshold is reached.  As the conclusion to the Advisory notes: “Accordingly, to the extent the $50 […]

Canada’s phase 5 mitigation map

Canada’s Office of the Superintendent of Financial Institutions (OSFI) is the first Regulator to break cover following BCBS\IOSCO’s 5 March statement. On 28 June the OSFI published a letter on its website, purporting to give guidance on the statement. For the convenience of its readers, the letter restates the BCBS\IOSCO statement, then goes on to […]

EMIR 2.0- indirect, possibly unintended, certainly consequential

Published in the OJ on 28 May, EMIR Refit entered into force on 17 June. Aimed at simplifying requirements and making obligations on smaller counterparties more proportionate, the Regulation is comprehensively summarised here. This short note focusses on one aspect of EMIR Refit’s key changes- its expansion of the scope comprised by “financial counterparty”. “Financial […]

The Latest on the Prospect of IM Phase 5 Relief

Were you at the ISDA legal forum held in New York on 11 June?  If so, we’d love to hear from you. Risk Magazine reports that Dawn DeBerry Stump, a CFTC Commissioner, lent her support to calls that US regulators should grant relief to firms which reside below the USD 50 million IM threshold.  At […]