ISDA CEO Touts Progress In Variation Margin Preparation

ISDA CEO Scott O'Malia touted the progress the financial industry has made in implementing the regulatory variation margin requirements for derivatives, and noted that, as September 1 approaches, the swaps industry is in a "much better position than it was earlier [in 2017]."

In a recent blog post, Mr. O'Malia explained that the regulatory timeline that was set initially for the "big-bang" implementation of variation margin requirements for over-the-counter derivatives created the risk of significant market disruption. At the end of February 2017, only about one third of the credit support annexes ("CSA") requiring amendment for compliance for new variation margin regulations had been amended. Although the rules became effective on March 1, 2017, regulators provided forbearance until September 1, 2017 in order to allow parties to prepare for a transition to the new rules. Mr. O'Malia announced that as of early August, the estimated percentage of required CSA