SEC Initial Margin Bolt-on Supplements

The following two supplements to existing ISDA margin documents have been published to facilitate compliance with the SEC’s initial margin requirements for uncleared security-based swaps. They reflect certain features of the SEC’s rules that differ from other margin regimes covered by the existing ISDA initial margin documentation. In particular, the SEC rules permit, but do not require, initial margin to be held with an independent custodian. As a result, supplemental documents have been prepared designed to work with existing ISDA margin documents to capture these additional features.

  • The SEC IM Supplement (Third Party Segregation) is designed for use where parties will segregate their SEC IM with an independent custodian. It relies on the segregation terms contained in the existing ISDA initial margin documents, and can be used with any of the following: 2018 IM CSA, 2018 IM CSD, 2019 Bank Custodian CTA, 2019 Clearstream CTA, and 2019 Euroclear CTA.
  • The SEC IM Supplement ([Omnibus][No] Segregation) is designed for use where parties will not segregate their SEC IM with an independent custodian, including both where the initial margin is not subject to any segregation, and where the party receiving the initial margin is required to comply with SEC omnibus segregation regulations. Because these arrangements are more similar to the non-segregated terms typically used for variation margin, this supplement has been designed to work with the parties’ variation margin agreement. It can be used with any of the following ISDA collateral documents: 1994 New York Law CSA, 2016 New York Law VM CSA, 1995 English Law CSA, and 2016 English Law VM CSA.

Free downloads for SEC Initial Margin Bolt-on Supplements (2)