Each September until 2020, increasing numbers of entities will be required to meet initial margin regulations as the threshold level for compliance reduces. Preparation for meeting these requirements will take significant time, and will involve intensive work to ensure systems, processes and documentation are in place.
ISDA has published a new fact sheet (in Traditional Chinese) that sets out the steps firms should take when preparing to comply with regulatory initial margin requirements. These are not necessarily presented in chronological order – the precise order and timing will depend on a firm’s specific circumstances.
STEP 1: Identify in-scope entities early
STEP 2: Make early disclosures to counterparties
STEP 3: Exchange information on compliance
STEP 4: Identify special cases
STEP 5: Establish custodial relationships
STEP 6: Prepare for compliance
STEP 7: Negotiate/execute documentation
STEP 8: Finalize preparations
Click on the PDF below to read the full list of steps.
Documents (1) for Getting Ready for Initial Margin: The Steps to Take (Traditional Chinese)
Latest
Raising Clients’ Awareness on Portability
Clients accessing a central counterparty (CCP) via a client clearing service provider (CCSP) for over-the-counter (OTC) and exchange-traded derivatives should consider what may happen to their positions and collateral in a scenario in which the CCSP defaults. While regulatory regimes...
Response to FCA on Ancillary Activities Test
On August 28, ISDA and FIA submitted a joint response to the Financial Conduct Authority’s (FCA) consultation paper CP25/19 on the ancillary activities test to determine if commercial users or producers of commodities that trade in commodity derivatives, emission allowances...
Stress Scenarios for CCP IM Simulators
ISDA has published a paper that explains why stress scenarios that central counterparties (CCPs) use for default fund sizing cannot be used for forward-looking initial margin (IM) simulators. Typically, stress scenarios used by CCPs consist of a single step, transitioning...
Paper on EMIR 3 Active Account Representativeness
On September 4, ISDA, the European Fund and Asset Management Association (EFAMA) and FIA shared a paper with EU policymakers requesting clarification on the implementation of the active account requirement under the third European Market Infrastructure Regulation in relation to...