Trade Groups: Implementation Fixes Needed on Uncleared Margin Rules

In a letter yesterday, the American Bankers Association and four financial trades called on regulators to address lingering challenges as they continue implementation of the final policy framework for margin requirements for non-centrally cleared derivatives. The final phases of the framework — which was issued by the issued by the Basel, Switzerland-based Bank for International Settlements and the International Organization of Securities Commissions in 2013 — takes effect in most jurisdictions on Sept. 1, 2019 and 2020.

The associations noted that the final phases of implementation “present serious logistical challenges,” particularly the last phase (Phase 5), which will introduce initial margin requirements for a large universe of counterparties. The associations called for “targeted recalibrations that more appropriately tailor IM requirements” to address systemic risk and remove burdens to using globally approved IM models.