U.S. And European Authorities Address Industry Concerns About Upcoming Variation Margin Deadline

The Board of Governors of the Federal Reserve System ("FRB"), the Office of the Comptroller of the Currency ("OCC"), European Supervisory Authorities ("ESAs") and the IOSCO Board responded to industry concerns about the March 1, 2017 implementation deadline of variation margin requirements.

The FRB and OCC statements acknowledge the scope and scale of the changes that are required for compliance with the new variation margin rules, and set out principles that examiners are expected to use when determining compliance during initial examinations. The principles include the following:

• Covered swap entities are expected to be in full compliance with respect to counterparties that are swap entities and financial end users "that present significant exposures" as of March 1, 2017.