Follow Us

Follow us on Twitter  Follow us on LinkedIn

16 August 2016

ISDA publishes 2016 Variation Margin Protocol

Default: Change to:

The ISDA 2016 Variation Margin Protocol enables counterparties to quickly and efficiently put contractual documentation in place with multiple counterparties in order to implement the requirements, or to make changes to existing collateral agreements to bring them into compliance.

“The new margin rules for non-cleared derivatives represent a huge change for the market, and will require firms to make important changes to their derivatives documentation to ensure they comply with the requirements in each jurisdiction. That could involve hundreds if not thousands of collateral agreements for large derivatives users. The ISDA 2016 Variation Margin Protocol is intended to allow those firms captured by the rules to make those changes as efficiently as possible,” said Scott O’Malia, ISDA’s Chief Executive.

Under a globally coordinated implementation schedule developed by the Basel Committee on Banking Supervision and the International Organization of Securities Commissions, financial firms with the largest derivatives portfolios globally are scheduled to exchange initial and variation margin on their non-cleared derivatives trades from September 1, 2016. Initial margin requirements will be phased in for other entities over a four-year period, but all firms under the scope of the rules will have to post variation margin from March 1, 2017. Several jurisdictions, including the US and Japan, have adhered to this international schedule.

The new Protocol is targeted specifically at the March 2017 ‘big bang’ implementation of variation margin rules. In order to complete the amendment process, parties will need to exchange questionnaires under the terms of the Protocol. The Protocol is now open for adherence on ISDA’s website, and an electronic version of the questionnaire will be available on ISDA Amend in October 2016.

Full press release


© ISDA - International Swaps and Derivatives Association

< Next Previous >
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information

Add new comment