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Buy-side perspective: Relief (for some) as new initial margin deadline published

Buy-side perspective: Relief (for some) as new initial margin deadline published
  • United Kingdom
  • Financial services and markets regulation
  • Financial services


On 23 July 2019, the Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”) issued a statement which recommended to regulators that an additional phase be added to the staged implementation of the initial margin requirements for uncleared derivatives transactions.

Our previous briefing regarding the initial margin ‘big-bang’ can be found here.

BCBS and IOSCO recommend that, if an entity falls within the Phase 5 implementation period currently and its aggregate average notional amount (“AANA”) does not exceed a new threshold of €50 billion, that entity will benefit from a one-year extension of the final implementation phase for initial margin.

The revised position is summarised in the following table:



Implementation date

Phase 5

< €750 billion ≥ €50 billion

1 September 2020

New Phase 6

> €50 billion > €8 billion

1 September 2021

BCBS and ISCO have published a revised version of the margin requirements on their website here.

The move will be welcomed by buy-side firms at the lower-end of the AANA threshold some of whom, in the face of likely strain on available industry resources as a result of the changes, might have found it challenging to comply by the relevant deadline. The new phasing should ensure that the initial margin ‘big-bang’ is less of a seismic event than originally thought.

How can Eversheds Sutherland assist?

Our global derivatives team has been advising clients regarding the initial margin requirements since the requirements were first introduced. As a buy-side focused derivatives practice, we have a deep understanding of the requirements of buy-side entities including insurance companies, pension schemes, commodities firms and investment funds.

We have worked with clients to scope the requirements and to develop standardised initial margin documentation. We can also produce a formal review of the enforceability the collateral arrangements if required under the relevant margin regime.

Members of our global derivatives practice have been active participants in industry working groups in relation to the new regulations including the ISDA Working Group on Margin Requirements (WGMR).