Clearing: Standard Initial Margin Model (SIMM)

ISDA Publishes Initial Thoughts on SIMM

On 2 September 2013, the Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”) published their final policy document regarding “Margin requirements for non-centrally cleared derivatives”. Under the guidance, firms will be required to exchange initial margin (IM) on a gross basis. Regulatory Reform: ISDA Publishes Initial Thoughts on SIMM

ISDA Tables Standard Initial Margin Model

The International Swaps and Derivatives Association has moved forward with plans to standardise initial margin calculations across the industry, as the derivatives market looks to wrestle with costly regulatory requirements associated with uncleared swaps. IFR Asia: ISDA Tables Standard Initial Margin Model.

ISDA Releases Standard Initial Margin Model (SIMM) for Non-Cleared Derivatives

In order to facilitate the introduction of final BCBS-IOSCO guidelines for “Margin requirements for non-centrally cleared derivatives”, published September 2, 2013 (BCBS 261, “the Guidelines”), ISDA is proposing a standard initial margin model (SIMM) which could be used by market participants. Securities Finance Monitor: ISDA Releases Standard Initial Margin Model (SIMM) for Non-Cleared Derivatives.

Other Clearing News

Swap Clearing: an Inconvenient Truth

This week’s International Financing Review reports that BNY Mellon is closing its swaps clearing service, a mere three years after its inception. Regulatory Reform: Swap Clearing: an Inconvenient Truth.

The First FCM Faller | BNY Bags Client Clearing

According to this IFR story, BNY has cut its OTC clearing business due to “market and regulatory factors that will limit our ability to grow the business”. The OTC Space: The First FCM Faller | BNY Bags Client Clearing.

CFTC Weekly Swaps Report: Over $205 Trillion in IRS Swaps Volume Cleared Through November 29

As part of its efforts toward greater transparency in the derivatives markets, the CFTC announced in November that it has created a Weekly Swaps Report, which provides a detailed view of trading activity in the swaps market. DerivAlert: CFTC Weekly Swaps Report: Over $205 Trillion in IRS Swaps Volume Cleared Through November 29,

Fidessa Examines the New Workflow for FCMs

Fidessa group plc has today announced the publication of a new white paper, You Only Live Twice, examining the metamorphosis of the global derivatives industry as it faces up to the practical realities of its economic and regulatory environment. In particular, it looks at how some FCMs are already re-tooling to take advantage of the opportunities created. Fidessa: Fidessa Examines the New Workflow for FCMs.

'Don't Make Us Clear Inflation Swaps,' Dealers Plead

Inflation swap clearing should not be compulsory when it launches next year, some dealers are warning. The collapse of one of the big banks that dominate the market would overwhelm a central counterparty's (CCP) ability to cope, they fear – and even LCH.Clearnet, which had been hoping to start offering the service during 2013, suggests a bedding-in period might be needed before regulators step in. Risk: 'Don't Make Us Clear Inflation Swaps,' Dealers Plead. 

Opalesque Roundtable NY: Byron Baldwin on EurexOTC Clear

Eurex Clearing’s OTC offerings was one of the topics at the Opalesque Roundtable in November. Byron Baldwin participated for Eurex Clearing. Eurex Clearing: Opalesque Roundtable NY: Byron Baldwin on EurexOTC Clear.  

Collateral Management 

VAB’s Winter: Collateral Rules Risk Derivatives and Liquidity

Stefan Winter, chairman of the board of directors of the Association of Foreign Banks in Germany (VAB), asks how new regulation affects the future of collateral management. Risk: VAB’s Winter: Collateral Rules Risk Derivatives and Liquidity.

Northern Trust Upgrades Collateral Management System to Include Mortgage-Backed Securities

Northern Trust has enhanced its collateral management system to include forward settling mortgage-backed securities (MBS) in response to new margin recommendations affecting asset managers that use the securities in a variety of fixed income trading strategies. Securities Finance Monitor: Northern Trust Upgrades Collateral Management System to Include Mortgage-Backed Securities.