BCBS, IOSCO Delay Upcoming Compliance Dates for Initial Margin for Uncleared Derivatives by One Year

Coronavirus Updates

BCBS, IOSCO Delay Upcoming Compliance Dates for Initial Margin
for Uncleared Derivatives by One Year

April 10, 2020

 

bcbs_01.pngResponding to a request by the IAA and other trade associations, the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) have extended by one year the deadline for completing the final two implementation phases of the initial margin (IM) requirements for non-centrally cleared derivatives (Uncleared Margin Rules). The deadline for Phase 5 will be moved from September 1, 2020 to September 1, 2021 and from September 1, 2021 to September 1, 2022 for Phase 6.

The IAA and allied groups requested a one-year delay in light of the significant challenges posed by the coronavirus pandemic (COVID-19), including the severe impact on firms’ ability to continue on schedule to implement the uncleared margin, the displacement of staff, and the need for firms to focus resources on managing risks associated with current market volatility due to personnel, systems and other issues.

iosco.jpegThe letter also noted that due to market volatility, firms are avoiding infrastructure updates and may be unable to complete, deploy or test infrastructure needed to support regulatory IM requirements. The letter asked BCBS and IOSCO to issue an immediate, public recommendation to global regulators to suspend the compliance dates for phase in and recommended that global regulators act swiftly to provide corresponding reassurance in their jurisdictions while they work to address necessary rule amendments or other means to effect this decision.

 

TAGS: Derivatives,  Coronavirus

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