The Basel Committee on Banking Supervision and the International Organization of Securities Commissions (IOSCO) have extended the implementation for new international margin requirements for non-centrally cleared derivatives by one year.
The Basal Committee is owned by 60 central banks and represents their views. The IOSCO is an international body that brings together the world’s securities regulators.
They revised the framework for margin requirements for non-centrally cleared derivatives, which are financial securities not cleared by a central counterparty, back in 2015. Since then they have been working towards implementing the new standard across the world.
However, the Basal Committee and the IOSCO has now agreed to extend the implementation period by one year. The stated reason for this is to give organizations enough time to implement the changes. The final implementation will now happen on September 1 2021. Once implemented, covered entities with an aggregate average notional amount of non-centrally cleared derivatives greater than €8bn will be subject to the requirements or risk being non-compliant towards the new rules.
The extension comes after the two issued a statement in March 2019 noting that the framework did not specify documentation, custodial or operational requirements if a covered entity’s bilateral initial margin amount does not exceed the framework’s €50m initial margin threshold.
Copyright © 2018 RegTech Analyst
