---
title: Industry Welcomes Delay on Margin Rules
description: The final implementation phase will take place on 1 September 2022.
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 04.06.2020

 By Shanny Basar

 Regulation

# Industry Welcomes Delay on Margin Rules

 04.06.2020 By Shanny Basar

![Industry Welcomes Delay on Margin Rules](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/Depositphotos_126289372_xl-2015-May-12-2022-09-10-09-81-AM.jpg)

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The Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) continue to monitor the impact of the rapid spread of the coronavirus disease (Covid-19) on the global financial system.

https://twitter.com/BIS\_org/status/1246091091713110016

In light of the significant challenges posed by Covid-19, including the displacement of staff and the need for firms to focus resources on managing risks associated with current market volatility, the Committee and IOSCO have agreed to extend the deadline for completing the final two implementation phases of the margin requirements for non-centrally cleared derivatives, by one year. This extension will provide additional operational capacity for firms to respond to the immediate impact of Covid-19 and at the same time, facilitate covered entities to act diligently to comply with the requirements by the revised deadline.

With this extension, the final implementation phase will take place on 1 September 2022, at which point covered entities with an aggregate average notional amount (AANA) of non-centrally cleared derivatives greater than €8 billion will be subject to the requirements. As an intermediate step, from 1 September 2021 covered entities with an AANA of non-centrally cleared derivatives greater than €50 billion will be subject to the requirements.

The Committee and IOSCO have published a revised version of the margin requirements to reflect this revision on their websites. The revised publication features no other substantive changes to the margin requirements framework.

Source: BIS

**EFAMA, which represents the EU asset management industry,** said:

https://twitter.com/EFAMANews/status/1246109952906756097

**Peter Rippon, chief executive of derivatives analytics firm OpenGamma,** said in an email:

[![](https://articles.marketsmedia.com/hs-fs/hubfs/Imported_Blog_Media/OpenGamma-PeterRippon-700x700-150x150-May-12-2022-09-08-07-23-AM.jpg?width=150&height=150&name=OpenGamma-PeterRippon-700x700-150x150-May-12-2022-09-08-07-23-AM.jpg)](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/OpenGamma-PeterRippon-700x700-May-12-2022-09-08-08-06-AM.jpg) Peter Rippon, OpenGamma

“Certain market participants behind on their UMR preparations will be applauding this move by the Basel Committee and IOSCO. Many firms are still getting to grips with the fact that they will have to post hundreds of millions in initial margin for the first time.

This extension at least provides some much needed time to put detailed plans in place in order to trade more efficiently. In the months ahead, expect to see more and more firms with uncleared swaps portfolios move away from trading bilateral uncleared derivatives, and shift towards central clearing.”

**John Straley, executive director, institutional trade processing at DTCC,** said in an email:

[![](https://articles.marketsmedia.com/hs-fs/hubfs/Imported_Blog_Media/John-Straley-1.jpg?width=150&height=150&name=John-Straley-1.jpg)](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/John-Straley-1.jpg) John Straley, DTCC

"DTCC supports the decision by the Basel Committee on Banking Supervision (BCBS) and International Organization of Securities Commissions (IOSCO) to delay the implementation of the final two phases of the uncleared margin rules (UMR) for non-centrally cleared derivatives by one year as a result of the Covid-19 pandemic.

Covid-19 is an industry-wide challenge and the additional time provided by the UMR delay will be welcomed by industry participants as they focus resources on managing risks associated with current market volatility in conjunction with future regulatory requirements."

**Alexander McDonald, chief executive of EVIA (European Venues and Intermediaries Association),** said in an email:

“Whilst the prior financial crisis witnessed a flight to quality, the events in February and March have evidenced a flight to liquidity. The financial market participants have shredded assets in favour of USD cash, clearly to a great extent to meet margin calls.

It is clearly in light of these sweeping impacts, that the delays to further require non-financial counterparties to post cash collateral have been granted by the global standard setters.”

**Sean Tuffy, head of regulatory intelligence, Securities Services at Citi,** summarized the actions that regulators have taken in response to the Covid-19 pandemic in his latest *What Does in Mean for FinReg ?* report:

The European Securities and Markets Authority has extended consultations on the MiFID transparency and third-country rules by four weeks and the US Securities and Exchange Commission has delayed any action on its proposed Derivatives Rule until 24 April.

Esma also delayed the live date of the first phase of the Securities Financing Transactions Regulation reporting requirements by three months.

[![Sean Tuffy, Citi](https://articles.marketsmedia.com/hs-fs/hubfs/Imported_Blog_Media/tuffy-sean-May-12-2022-09-03-21-12-AM.jpg?width=200&height=200&name=tuffy-sean-May-12-2022-09-03-21-12-AM.jpg)](https://articles.marketsmedia.com/hubfs/Imported_Blog_Media/tuffy-sean-May-12-2022-09-03-21-12-AM.jpg) Sean Tuffy, Citi

Additionally, the September deadline for the fifth wave of the Initial Margin requirements for uncleared derivatives has been delayed by a year.

"Regulators have been pragmatic in their response to the COVID-19 outbreak and if it stretches on, it’s possible that they will delay implementation dates as they get closer," he added. "Nonetheless, firms can’t bank on any delays and should continue to prepare for these regulations to go live as scheduled."

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