BCBS and IOSCO Delay Non-Cleared Margin Rules
On April 3, the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commission (IOSCO) published a statement to delay the implementation of the final two phases of margin requirements for non-cleared derivatives by one year due to the COVID-19 pandemic (the Statement).
The Statement notes that the final two phases of the implementation of these margin requirements for non-cleared derivatives will take place on September 1, 2022, at which point many buy-side firms with derivatives of an aggregate average notional amount exceeding €8 billion will have to comply with the rules.
The Statement also confirms that firms with derivatives of an aggregate average notional amount exceeding €50 billion will also see a delay and be subject to the requirements from September 1, 2021, one year later than originally planned.
The delays to the implementation of the rules expect to allow firms to focus resources on managing risks associated with the current market volatility caused by the COVID-19 pandemic.
The BCBS and IOSCO have published a revised version of the margin requirements to reflect these delays (the Revised Margin Document). The Revised Margin Document does not contain any other substantive changes to the margin requirements framework.