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Singapore and Korea join rush to delay IM
The Korean Regulator, FSS, is the latest regulator to announce that they will adopt the BCBS/IOSCO guidelines for mitigating risk for non-cleared OTC contracts. This decision follows a recent publication by the MAS (Singapore’s regulatory authority) where they stated that they would also use BCBS/IOSCO’s framework for Non-Centrally Cleared Derivatives in determining whether margin requirements […]
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ISDA applies further French twist to IM documentation
Last July, ISDA decided to add French and Irish law to our library of Master Agreements in an attempt to prepare for potential Brexit complications. As mentioned in our earlier post, the objective of this is not to undermine English and New York law, but merely to offer an alternative so firms are awarded a […]
Senior managers school report – ‘could do better’
The FCA’s recently published Stocktake Report reviewing the implementation of the Senior Managers and Certification Regime (SM&CR) is a polite criticism of senior managers and their superiors in the banking sector. The report consisted of interviews with trade associations, Banking Standards Board, FCA and the PRA to understand how SM&CR has been implemented since it […]
IM- the breakdown (averted)
As expected, ISDA have communicated a more granular breakdown of estimates for the likely population of the new IM phases 5 and 6, via relevant working groups. These have been replicated and published by a number of third party firms. Although all the numbers are estimated, there seems to be both a lack of mathematical […]
IM Phase 5 to bifurcate
Confirming recent market rumours, BCBS\IOSCO have today announced their recommendation to stagger IM Phase 5 implementation over a two year period. An adjusted Phase 5 will apply to firms with an AANA equal to or greater than USD\EUR 50bn and less than 750bn. A new Phase 6, from 1 September 2020 to 1 September 2021, […]
Phase 5 mitigation mitigated
Trailing in the wake of their northern neighbours, the CFTC has today issued a Staff Advisory confirming that there is no requirement for covered swap entities (CSEs) to put IM documentation and custody arrangements in place before the $50m threshold is reached. As the conclusion to the Advisory notes: “Accordingly, to the extent the $50 […]
Canada’s phase 5 mitigation map
Canada’s Office of the Superintendent of Financial Institutions (OSFI) is the first Regulator to break cover following BCBS\IOSCO’s 5 March statement. On 28 June the OSFI published a letter on its website, purporting to give guidance on the statement. For the convenience of its readers, the letter restates the BCBS\IOSCO statement, then goes on to […]
EMIR 2.0- indirect, possibly unintended, certainly consequential
Published in the OJ on 28 May, EMIR Refit entered into force on 17 June. Aimed at simplifying requirements and making obligations on smaller counterparties more proportionate, the Regulation is comprehensively summarised here. This short note focusses on one aspect of EMIR Refit’s key changes- its expansion of the scope comprised by “financial counterparty”. “Financial […]
The latest on the prospect of IM Phase 5 relief
Were you at the ISDA legal forum held in New York on 11 June? If so, we’d love to hear from you. Risk Magazine reports that Dawn DeBerry Stump, a CFTC Commissioner, lent her support to calls that US regulators should grant relief to firms which reside below the USD 50 million IM threshold. At […]
Uncleared margin rules – no solace in relief
On 3 June 2019, ISDA, SIFMA and the GFMA wrote a letter to the CFTC, the Fed, the US Treasury, the SEC, the FDIC, the Farm Credit Administration and the Federal Housing Finance Agency seeking clarification that covered swap entities do not have to comply with the documentation requirements of the uncleared margin rules unless […]