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Deadline on Non-Cleared Margin Looms 

June 10, 2015


With little more than a year to go before a September 2016 implementation deadline for margin rules for non-cleared swaps, OTC users face a multitude of compliance challenges, including mandatory exchange of bi-lateral initial margin, automated processing of segregated collateral assets, verified management of collateral disputes, and unbundling of collateral movements into currency specific silos.

The new regulations, promulgated by the Basel Commitee on Banking Supervision and the International Organization of Securities Commissions (Iosco), will take effect on September 1, 2016. Once implemented, it is expected that margin volumes will surge three to 10 times above current levels.

“It’s a very significant impact on the market,” Chris Walsh, chief operating officer of AcadiaSoft, which provides a margining platform for OTC derivatives, told Markets Media. “Today, derivatives margin call activity is about 50,000 calls per day and we’re going to see that multiply pretty significantly. The reason is that regulators have placed a strong focus on reducing systemic risk.”

In September 2013, the Working Group on Margin Requirements, an initiative jointly run by the Basel Committee on Banking Supervision and Iosco issued the final margin policy framework for non-cleared, bilateral derivatives.

Read more: MarketsMedia

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