Banks Given Nine Month Respite to Margin Rules

International regulators have granted a nine month delay to rules requiring banks and brokers to post margin for uncleared over-the-counter (OTC) derivatives.
By Joe Parsons(2147488729)
International regulators have granted a nine month delay to rules requiring banks and brokers to post margin for uncleared over-the-counter (OTC) derivatives.

The Basel Committee, part of the Bank of International Settlements (BIS), and the International Organization of Securities Commissions (IOSCO), announced the rules for collecting and posting initial margin will be pushed back from December 1 2015 to September 1 2016.

The revision also includes a six month phase-in period for the exchange of variation margin, beginning September 1 2016.

The decision has been welcomed by the International Derivatives and Swaps Association (ISDA), which represents the world’s major swap dealers.

“Firms have been working hard to prepare for the rules, but the changes would have been all but impossible to complete by the original December 2015 effective date, particularly as final rules have not yet been published by US, European and Japanese authorities,” says Scott O’Malia, CEO, ISDA.

“While still challenging without final rules, the revised implementation date should give firms additional time to develop, implement and test new systems… We urge the national regulators to publish the final rules as soon as possible, and we look forward to working closely with the regulators over the coming months.”

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