Margin

A Solution for the IM Big Bang

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With everything else going on, it’s tempting to shove something with a September 2020 deadline to the back of the line. That’s not an option when it comes to initial margin (IM) requirements. With over 1,100 small firms expected to come into scope, each needing to put IM documentation and systems in place, an early start on compliance efforts will be critical. Even then, the industry faces a very real capacity challenge.

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ISDA CEO Scott O’Malia Guest Remarks at Exchequer Club Luncheon in Washington, DC

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Exchequer Club Luncheon

Mayflower Hotel, Palm Court Ballroom, Washington, DC

January 16, 2019

Scott O’Malia, CEO, ISDA

 

Thank you for that kind introduction.

Good afternoon – it’s a real privilege to be here today and to share ISDA’s perspective on financial policy developments and future challenges.

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Time for Recalibration – IQ January 2019

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It’s traditional to start the New Year with a few predictions. When it comes to forecasting the priorities for derivatives markets, however, this year’s list is easier than most to put together: Brexit, benchmark reform, margin, cross-border issues and technology.

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What makes your initial margin volatile?

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If you run a ‘buy and hold’ strategy you don’t expect your initial margin requirement to change much. You would even hope that margin would progressively fall over time as the duration decreases. But, this isn’t always the case…sometimes you will see big step changes in margin that can be as much as 100% –  a lot of potential capital to […]

The post What makes your initial margin volatile? appeared first on OpenGamma.

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Aussie IM Phase 4 double whammy

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Bill: More work for Phase 4 UMR, if we're unlucky.


Opinions obviously vary, but for me there are very few opportunities to be glad not to be Australian. Here is one for already punch-drunk IM lawyers and compliance personnel. The largest four banks in New Zealand are Australian-owned- ANZ, ASB, BNZ and Westpac. New Zealand is not a G20 member and has therefore been (relatively) […]

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CFTC nod and a wink for IM phase 5 depopulation

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The CFTC’s Office of the Chief Economist (OCE) has responded to industry petitions to mitigate the widely-forecasted IM Phase 5 oncoming storm. Readers will recall the July 2018 ISDA/SIFMA white paper previewing the phase 5 population explosion and recommending various reduction strategies: • Raising the in-scope AANA threshold from $8bn. to $100bn. • Postponing mandatory […]

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Clearing Incentives, Systemic Risk and Margin Requirements

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Central clearing of standardized derivatives and margin requirements for non-cleared derivatives are two of the basic tenets of global financial regulatory reform. They are also inter-related: the purpose of margin requirements is to both reduce systemic risk and promote or incentivize central clearing.

Recent studies and research into clearing incentives and margining raise questions about whether certain aspects of the requirements do in fact support these key policy goals. These questions include:

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U.S Hedge Funds can save millions as new rules threaten cost escalation

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Hedge funds facing perplexing regulations can make significant margin savings. According to our new findings, a hedge fund moving 10 positions between dealers can save a huge 25% in initial margin – which equates to hundreds of millions of dollars. These savings free assets for fund managers to scale up positions to drive additional returns. The findings will come as welcome […]

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Charles River Forms Business Alliance with Cassini Systems to Automate Margin Estimation

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