We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
Most Read Contributor in United States, December 2018
ISDA CEO Scott O'Malia touted the progress the financial
industry has made in implementing the regulatory variation margin
requirements for derivatives, and noted that, as September
1 approaches, the swaps industry is in a "much better
position than it was earlier [in 2017]."
In a recent blog post, Mr. O'Malia explained that the
regulatory timeline that was set initially for the
"big-bang" implementation of variation margin
requirements for over-the-counter derivatives created the risk of
significant market disruption. At the end of February 2017, only
about one third of the credit support annexes ("CSA")
requiring amendment for compliance for new variation margin
regulations had been amended. Although the rules became effective
on March 1, 2017, regulators provided forbearance until September
1, 2017 in order to allow parties to prepare for a transition to
the new rules. Mr. O'Malia announced that as of early August,
the estimated percentage of required CSA amendments that had been
completed stood at over ninety percent.
Mr. O'Malia expressed his gratitude to regulators for the
forbearance they provided, and lauded the industry for its progress
over the last several months in preparing for the upcoming
transition:
"[T]here's little doubt the extra six months was
absolutely vital and averted what could have been a big problem on
March 1. Regulators deserve credit for addressing the concerns by
providing forbearance – and the industry has worked
diligently to make the necessary changes during that
time."
Mr. O'Malia also drew attention to the question of trades
executed after March 1 and their regulatory treatment. He noted
that the industry is operating on the assumption that those trades
will have to be unwound if required CSA amendments are not in place
by September 1, 2017.
Mr. O'Malia noted that, as compliance challenges continue to
arise, ISDA will keep working with the industry throughout the
implementation period. He also announced that ISDA is preparing to
launch the next iteration of its Standard Initial Margin Model,
"ISDA SIMM 2.0."
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The payments and money transmission regulatory landscape continues to evolve. A key new development is that Michigan has affirmed by legislation that "agent of a payee" ...
The Grateful Dead were noted in their live performances for, among other things, beginning a song and then segueing to one or more other songs before concluding the first song in the thread.
In late December 2018, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively, the Agencies)
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Jones Day's Jay Tambe Discusses Navigating The Potential Emerging Markets Debt Crisis (Video Content)
