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ISDA® Publishes 2018 Information Letter for Initial Margin
Practical Law Legal Update w-015-7652 (Approx. 4 pages)
ISDA® Publishes 2018 Information Letter for Initial Margin
by Practical Law Finance
| Published on 12 Jul 2018 • USA (National/Federal) |
ISDA® published an information letter for initial margin (IM) that enables parties to provide notice to counterparties regarding expected future compliance with IM requirements for purposes of the September 2019 and September 2020 regulatory IM phase-in dates.
On July 11, 2018, ISDA® published an information letter for initial margin (information letter) that enables parties to provide notice to counterparties regarding expected future compliance with initial margin (IM) requirements for uncleared swaps in the US, EU, Canada, Japan, and Switzerland (the jurisdictions) for purposes of the September 2019 or September 2020 compliance phase-in dates (see Practice Note, The New ISDA® Credit Support Annexes and Global Margin Compliance for Uncleared Swaps: Applicable Rules and Phase-In Dates).
The information letter is formatted with a standard set of questions that a party (Party A) completes and sends to its counterparties, enabling Party A to notify its counterparties that either:
- Party A plans on preparing IM documentation for the September 1, 2019 phase-in date.
- Party A plans on preparing IM documentation for the September 1, 2020 phase-in date.
- Party A does not expect to be in scope for the IM requirements for either the September 1, 2019 or September 1, 2020 phase-in dates.
In June 2016, ISDA published a Regulatory Margin Self-Disclosure Letter (ISDA SDL) that is a standard form letter designed to help parties comply with regulatory margin requirements in the jurisdictions by making certain elections and representations (see Legal Update, ISDA Publishes Self-Disclosure Letter to Help Market Participants Comply with Margin Rules for Uncleared Swaps). The ISDA SDL is intended to assist parties in determining the extent to which their trading relationship is or will become subject to uncleared swap margin requirements in any of the jurisdictions.
In October 2016, ISDA made the ISDA SDL available on ISDA Amend 2.0 (see Legal Update, ISDA® and IHS Markit Launch ISDA Amend 2.0 to Assist with Margin Compliance and Resolution Stay: ISDA Amend 2.0 and the ISDA Margin Self-Disclosure Letter (SDL)).
The information letter is designed specifically for providing advance notice to counterparties regarding preparations for the upcoming September 2019 or 2020 IM compliance dates.
For information on the global compliance dates for IM requirements, see Practice Note, The New ISDA® Credit Support Annexes and Global Margin Compliance for Uncleared Swaps: Applicable Rules and Phase-In Dates.
For information on the US margin rules, see Practice Note, The Dodd-Frank Act: Margin Posting and Collection Rules for Uncleared Swaps.
"ISDA" is a registered trademark of the International Swaps and Derivatives Association, Inc. (ISDA). ISDA is not a sponsor of Practical Law and had no part in the development of this resource.