ISDA releases initial margin survey results
20 April 2020 New York
Image: ESB Professional / Shutterstock
The International Swaps and Derivatives Association (ISDA) has released the results of its survey, which analyses the amount and type of initial margin (IM) and variation margin (VM) posted for non-cleared derivatives.
The need for IM has grown with each phase of implementation of the Uncleared Margin Rules (UMR).
The last two phases of UMR were recently delayed by 12 months and will now come into effect in September 2021 and September 2022 respectively. The grace period was granted to accommodate firms struggling to meet the timetable amid the COVID-19 pandemic.
In its latest survey, the association found that the 20 largest market participants (phase-one firms) collected approximately $173.2 billion of IM for their non-cleared derivatives transactions at year-end 2019.
This represents a 10 percent increase compared to the $157.9 billion of IM that phase-one firms collected at year-end 2018.
In total, the survey collected responses from 27 firms, including 20 phase-one, four phase-two and three phase-three firms, which collected about $183.7 billion of IM and $944.7 billion of VM at year-end 2019.
A further $68 billion of IM was collected from counterparties and for transactions that are not in-scope of the margin rules.
The amount of regulatory IM has been increasing as margin rules for non-cleared derivatives have been phased-in since September 2016 and more firms and new transactions have become subject to the requirements.
The majority ($105.2 billion) of the IM collected by phase-one firms was required under global margin regulations and came from phase-one, phase-two, phase-three and phase-four firms currently in scope of the margin rules.
This represents an increase of 25 percent compared to the $83.8 billion of regulatory IM collected at year-end 2018.
The need for IM has grown with each phase of implementation of the Uncleared Margin Rules (UMR).
The last two phases of UMR were recently delayed by 12 months and will now come into effect in September 2021 and September 2022 respectively. The grace period was granted to accommodate firms struggling to meet the timetable amid the COVID-19 pandemic.
In its latest survey, the association found that the 20 largest market participants (phase-one firms) collected approximately $173.2 billion of IM for their non-cleared derivatives transactions at year-end 2019.
This represents a 10 percent increase compared to the $157.9 billion of IM that phase-one firms collected at year-end 2018.
In total, the survey collected responses from 27 firms, including 20 phase-one, four phase-two and three phase-three firms, which collected about $183.7 billion of IM and $944.7 billion of VM at year-end 2019.
A further $68 billion of IM was collected from counterparties and for transactions that are not in-scope of the margin rules.
The amount of regulatory IM has been increasing as margin rules for non-cleared derivatives have been phased-in since September 2016 and more firms and new transactions have become subject to the requirements.
The majority ($105.2 billion) of the IM collected by phase-one firms was required under global margin regulations and came from phase-one, phase-two, phase-three and phase-four firms currently in scope of the margin rules.
This represents an increase of 25 percent compared to the $83.8 billion of regulatory IM collected at year-end 2018.
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