The Deadline for Compliance With U.S. Variation Margin Rules Has Been Extended—Are You Ready Yet?
Author: James M. Cain.; Meltem F. Kodaman.; Raymond A. Ramirez.
Source: Volume 30, Number 03, Spring 2017 , pp.17-22(6)
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Abstract:
Compliance with U.S. bank regulator and Commodity Futures Trading Commission rules requiring variation margin to be posted and collected for over-the-counter swap transactions between swap dealers and financial end-users was required as of March 1, 2017. Swap dealers will be unable to trade over-the-counter swaps with financial end-users absent mutual compliance with the new rules. Compliance with the new requirements will necessitate changes to existing trade documentation and collateral management practices. This article provides an overview of the variation margin rule and methods for compliance.Keywords: Dodd-Frank, swap dealer, over-the-counter swap documentation, average daily aggregate notional amount, cross-border swaps, ISDA Variation Margin Protocol, margin, uncleared or OTC swaps, eligible collateral
Affiliations:
1: Sutherland Asbill & Brennan LLP; 2: Sutherland Asbill & Brennan LLP; 3: Sutherland Asbill & Brennan LLP.