Introduction On 16 August 2016, ISDA published the “2016 Variation Margin Protocol” (the “VM Protocol”), designed to assist counterparties in amending CSA documentation so as to comply with Working Group on Margin Requirements (WGMR) rules as implemented locally by: The US “Prudential Regulators”; The CFTC; The Financial Services Agency of Japan; and The Canadian Office […]

Hat tip to Bloomberg and the Wall Street Journal for revealing the EU`s intention to unilaterally delay the September deadline for margin requirements. Presented as “procedural” by the European Commission, the delay would be more accurately described as “extremely material” as it will disrupt the internationally-agreed timeline set in the BCBS-IOSCO framework for margin requirements […]

Introduction On 14 April 2016 ISDA published the New York law “2016 Credit Support Annex for Variation Margin (VM)” (the “NY-law VM CSA”).  Subsequently, on 29 April 2016 it published the English law “2016 VM Credit Support Annex for Variation Margin (VM)” (the “English-law VM CSA” and together with the NY-law VM CSA, the “VM […]

ISDA has yesterday published its long-awaited 2016 Credit Support Annex for Variation Margin for use with New York law. The VM security-interest CSA is the first in a series of new market-standard documentation and will be joined by VM CSAs under English and Japanese law, IM CSAs and a protocol to assist amendment of legacy documents. […]

SIFMA has published a letter to the Prudential Regulators confirming a market-wide move to explicitly classify variation margin (VM) as settlement rather than collateral. The exercise has substantial implications for the amount of regulatory capital that must be held against cleared OTC derivatives. The effect is to radically reduce the potential future exposure (PFE) element […]

Two of the US prudential regulators[1], the FDIC and the OCC, have voted to jointly adopt final rules regarding the exchange of initial and variation margin for uncleared swaps. The rules will apply to entities that are i) under the supervision of a prudential regulator ii) have registered with the CFTC or SEC as a […]

On 1 October 2015, the Monetary Authority of Singapore (MAS) published its Policy Consultation on margin requirements for non-centrally cleared derivatives. In its broad outline, the Singapore regime would be similar to the internationally agreed BCBS-IOSCO Margin requirements for non-centrally cleared derivatives. That is not to say that entities in Singapore will avert all friction with […]

On 15 July 2015, the Bank of England published the summary of feedback received and policy response to the implementation of ESMA’s Guidelines and Recommendations on CCP interoperability arrangements. The Consultation Paper was published on 20 November 2014, seeking comments on a shortlist of five specific issues. The paper noted that the market practice essentially followed […]

The ISDA 2014 Collateral Agreement Negative Interest Protocol (the “Protocol”) has received renewed attention recently, with ISDA hosting a Market Education Webinar to discuss the structure and content of the Protocol on 11 March 2015, followed by the publication of a Statement on Negative Interest Rates on 12 March 2015 and a Market Guidance concerning Interest […]