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||March to May 2021||> EUR 50bn.||1 September 2021|
|Phase 6||March to May 2022||> EUR 8bn.||1 September 2022|
A revised version of the Margin Requirements for Non-centrally Cleared Derivatives has been issued.
Although not in explicit response, the announcement follows the advocacy letter from Trade Associations requesting an indefinite postponement of IM obligations. The BCBS/IOSCO statement echoes the letter’s Covid-19 concerns with respect to displacement of staff and the need to manage risks associated with market volatility. BCBC/IOSCO belive that the extension will
“provide additional operational capacity for firms to respond to the immediate impact of Covid-19 and at the same time, facilitate covered entities to act diligently to comply with the requirements by the revised deadline.”
As intended, the announcement is likely to result in a re-focus of resources from IM to now more immediate challenges.
In the current situation, the Regulatory environment is rapidly becoming more fluid. We shall continue to monitor and keep you apprised of all relevant developments.Contact Us