EU hits the non-cleared margin rule accelerator

The chairman of the Econ committee, Roberto Gualtieri, yesterday announced that the Parliament would state its lack of objection to the non-cleared margin rules RTS in the 3 day plenary session beginning 24 October, almost a month in advance of market expectations. Assuming a similar non-objection by the Council, Parliament’s expedition advances application of the phase 1 rules to a date likely to be in mid-December.

While such a sense of urgency is to be welcomed in EU financial regulation, this may be a rare case where delay is preferable. The shortened schedule will leave scant time to negotiate custody agreements, to open segregated accounts and to amend or replace CSA’s. A 15 December application date carries further peril by coinciding with festive features such as the year-end code freeze and limited available personnel. As usual, all is supposition until publication in the OJ’s Tower of Babel; however, market participants should be aware that time to prepare may have just got even shorter.

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