ISDA Publishes 2016 Variation Margin Credit Support Annex (NY Law)

On April 14, 2016, the International Swaps and Derivatives Association, Inc. ("ISDA") published the 2016 Variation Margin Credit Support Annex (New York Law) (the "2016 VM Annex (NY)"). The purpose of this document is to facilitate compliance with margin requirements for non-cleared derivatives scheduled to be phased in shortly in the United States.¹

In the United States, by the end of 2015, both the prudential regulators² and the Commodity Futures Trading Commission ("CFTC") had approved final rules generally imposing initial margin and variation margin requirements on certain regulated entities and their counterparties in connection with non-cleared derivatives.³ These rules incorporate compliance dates that depend on the type of margin (initial or variation),⁴ the types of counterparties and, generally, the volume of transactions entered into by the counterparties. The first of these compliance dates, which applies to trades between the largest derivatives users,