In response to the global financial crisis of 2008-2009, the Group of 20 nations agreed to a financial regulatory reform agenda covering the over-the-counter derivatives markets and market participants, among them recommendations for the implementation of margin requirements for non-centrally cleared derivatives. The Basel Committee on Bank Supervision and International Organization of Securities Commissions subsequently developed and finalized their Final Framework on Margin Requirements for Non-Centrally Cleared Derivatives, which sought to establish international standards for such requirements, to be phased in over time.
As agreed in the revised implementation timeline to the final framework, the uncleared margin rules (UMR) began to be phased-in on September 1, 2016 for the largest market participants. Broader implementation of variation margin (VM) requirements occurred in March 2017, while initial margin (IM) requirements continue to phase-in annually through 2020.
The final phases of the UMR will occur on September 1 of 2019 and 2020, when a large number of additional counterparties will be brought into scope for IM requirements. The fundamental challenges for market participants during the final phases of IM implementation are distinct from and more intense than those experienced in previous phases, and therefore likely to result in broader systemic impact.
In this paper, ISDA and the Securities Industry and Financial Markets Association (SIFMA) seek to highlight the significant challenges market participants will encounter during the final phases of IM implementation and identify the key tasks and resulting hurdles that must be overcome to ensure an orderly implementation that avoids disruption to the functioning of the derivatives market.
Documents (1) for Initial Margin for Non-Centrally Cleared Derivatives: Issues for 2019 and 2020
Latest
ISDA Launches Pre-adherence Period for Notices Hub
ISDA has begun a pre-adherence process for the ISDA Notices Hub, enabling firms to sign up to a free protocol that will allow them to use the new platform when it launches on July 15. Under the ISDA Master Agreement,...
ISDA SIMM EU Regulatory Approval Requirements
ISDA published ISDA SIMM version 2.7+2412 on May 22 – the first recalibration under the new semiannual cycle. The release triggered a new requirement for EU counterparties to apply for regulatory authorization to use the model – a submission that...
Creating Value - IQ June 2025
Ever since its establishment 40 years ago, ISDA has worked to enhance the safety and efficiency of derivatives markets. That has motivated everything we do – from the development of standard documentation and the rollout of new digital solutions to...
Paper on EC’s Sustainability Omnibus Proposal
On June 9, ISDA published a position paper setting out its views on the European Commission’s (EC) Sustainability Omnibus Package. In the paper, ISDA urges European authorities to: Ensure a proportionate, harmonized and symmetrical approach to the use of derivatives...