03 April 2020
As the Covid-19 pandemic triggers record levels of activity in the securities and derivatives markets, 20 industry associations have called for a delay in implementing the fifth wave of initial margin requirements for uncleared derivatives. flow’s Janet Du Chenne assesses how resilience in securities services is providing buy side and sell side firms with silver linings, despite the dark clouds overhanging them
Responding to talk of the system-wide margin call1, 20 industry associations which represent derivatives firms wrote a joint letter to the Basel Committee on Banking Supervision and International Organization of Securities Commissions (BCBS IOSCO) asking for a delay in implementing the fifth wave of initial margin rules for uncleared derivatives, or uncleared margin requirements.
Published last week, their letter states that while market participants have been working diligently to meet the final phases of these important compliance dates, they continue to deal with the fall-out from the Coronavirus epidemic and the volatility in the derivatives markets (see Figure 1). Consequently, they lack the bandwidth to support documentation and operational requirements for the regulatory initial margin (IM) compliance dates on September 1, 2020 (Phase 5) and September 1, 2021 (Phase 6).
Find out more about products and services
flow magazine is published twice per year and can be read online and delivered to your door in print