Global Regulators Delay Uncleared Derivatives Margin Rules | Practical Law

Global Regulators Delay Uncleared Derivatives Margin Rules | Practical Law

BCBS and IOSCO extended the implementation dates for non-cleared derivatives margin guidelines by nine months. Compliance is now scheduled to begin on September 1, 2016 for certain parties.

Global Regulators Delay Uncleared Derivatives Margin Rules

Practical Law Legal Update 6-605-1170 (Approx. 3 pages)

Global Regulators Delay Uncleared Derivatives Margin Rules

by Practical Law Finance
Published on 19 Mar 2015 • USA (National/Federal)
BCBS and IOSCO extended the implementation dates for non-cleared derivatives margin guidelines by nine months. Compliance is now scheduled to begin on September 1, 2016 for certain parties.
On March 18, 2015, the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) extended the implementation dates for global non-cleared derivatives margin guidelines by nine months and instituted a six-month phase-in of the requirement to exchange variation margin, beginning September 1, 2016.
The phase-in period for collecting and posting initial margin on non-centrally cleared trades has been delayed from December 1, 2015 to September 1, 2016. The phase-in period for the requirement to exchange variation margin in connection with these transactions has been delayed from December 1, 2015 to:
  • September 1, 2016 for covered entities whose aggregate month-end average notional amount of non-centrally cleared derivatives exceeds $3 trillion.
  • March 1, 2017 for all other over-the-counter (OTC) derivatives transactions and the business conduct of financial firms and systemically important non-financial entities (covered entities).
BCBS/IOSCO released a summary of the changes that details these new compliance dates.
The extension of the start date for non-cleared derivatives margin rules is a response to a request by ISDA to provide a two-year extension to provide additional time for firms to develop, implement and test new compliant systems (see Legal Update, ISDA Requests Delay of Global Uncleared Swaps Margin Rules).
CFTC chair Timothy Massad has indicated that US uncleared swaps margin rules are likely to be delayed by a few months in order to harmonize the US timetable with European and Japanese rules. For details on US uncleared swap margin rules, see Practice Note, The Dodd-Frank Act: Margin Posting and Collection Rules for Uncleared Swaps and CFTC Re-proposes Corollary Dodd-Frank Margin Rules for Uncleared Swaps.
For details on the BCBS/IOSCO global margin guidelines for non-cleared derivatives, see Legal Update, Final Global Margin Rules for Uncleared Derivatives Released by International Regulators and Practice Note, The Dodd-Frank Act: Derivatives Margin Posting and Collateral Rules: Final BCBS/IOSCO Guidelines on Uncleared Swap Margin Collateral.