ISDA, SIFMA, SIFMA AMG and the Association of the Luxembourg Fund Industry (collectively, the "Associations") called on regulators to make changes to uncleared derivatives margin requirements under EMIR.
The Associations expressed support of the Basel Committee on Banking Supervision's and IOSCO's joint statement regarding the final implementation of the margin requirements for non-centrally cleared derivatives. However, the Associations noted that counterparties will face impediments to implement and maintain an "IM calculation method to monitor their IM amounts and/or calculate IM for exchange" and urged that regulators should take action on: (i) the back-testing and internal governance requirements affiliated with globally approved initial margin ("IM") models and (ii) the "initial and on-going approval" on IM models of EMIR.
In particular, the Associations:
- called for the removal of back-testing and internal governance requirements as applied to non-dealers;
- identified several clarifications relating to to the "EMIR Refit" legislation that should be provided in regulatory technical standards relating to the process for approval for IM models; and
- requested additional certainty as to "whether the territorial scope of the IM model approval requirement" would be applicable only to EU-based entities.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
