ABA and the ABA Securities Association today wrote to U.S. regulators urging them to re-align their timeline for implementing the uncleared swaps margin rules with the European Union. The European Commission voted recently to delay implementation of the rules in the EU, which could lead to disruptions in the derivatives market if the rules are not implemented across all jurisdictions simultaneously. The rules are currently set to take effect in the U.S. and other foreign jurisdictions on Sept. 1.
Failing to align implementation timelines could create competitive disadvantages for U.S. swaps dealers and reduce liquidity for all market participants if counterparties choose to avoid trading with dealers subject to the U.S. margin rules, ABA and ABASA said. However, these challenges are avoidable if the U.S. and EU work together to resynchronize the implementation schedule, they added.