SEC Initial Margin Supplement (Alternative Compliance Mechanism)

The following supplement is intended for use by parties who anticipate operating under the alternative compliance mechanism for security-based swap dealers that are registered as swap dealers and have limited security-based swap activities (as set forth in Section 240.18a-10 of the SEC Margin Rules).

This supplement is only intended for use where the parties will calculate one Margin Amount for (a) their transactions (i.e., security-based swaps) that are subject to the initial margin requirements of SEC and (b) their transactions (i.e., swaps) that are subject to the initial margin requirements of CFTC (or, if applicable, as an alternative to CFTC, another regulatory regime in respect of which the CFTC has granted substituted compliance.  This Supplement is designed for use with any of the following documents: 2018 Credit Support Annex For Initial Margin (IM) (Security Interest – New York Law), 2018 Credit Support Deed For Initial Margin (IM) (Security Interest – English Law), ISDA 2019 Bank Custodian Collateral Transfer Agreement, 2019 Clearstream Collateral Transfer Agreement, and 2019 Euroclear Collateral Transfer Agreement.

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