Publication

"Checkpoint: Update - Implementation Schedule of Margin Requirements for Uncleared Derivatives"
 

On March 18, 2015, the Basel Committee on Banking Supervision and the International Organization of Securities Commissions (“IOSCO”) announced changes to the implementation schedule set forth in the international framework “Margin requirements for non-centrally cleared derivatives” (the “International Framework”), which was issued on September 2, 2013.

The International Framework had previously mandated full implementation of the requirement to exchange variation margin on December 1, 2015, and adopted a phase-in arrangement for the requirement to exchange initial margin, with the first implementation date set on December 1, 2015, and subsequent implementation dates on December 1 of 2016, 2017, 2018 and 2019.

As now revised, the International Framework contains a phase-in arrangement for the requirement to exchange variation margin, with the first implementation date set for September 1,
2016, and a subsequent implementation date on March 1, 2017.  The implementation dates for the requirement to exchange initial margin have each been pushed back nine months, with the first implementation date set for September 1, 2016, and subsequent implementation dates on September 1 of 2017, 2018, 2019 and 2020.  For these minimum initial and variation margin arrangements, the applicable phase-in date is based on the aggregate notional amount of uncleared derivatives exposure of an entity and its affiliates and the aggregate notional amount of uncleared derivatives exposure of the counterparty and its affiliates.
 

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