Featured Product

    AMF Issues Guideline on Margins for OTC Derivatives Not Cleared by CCP

    March 01, 2020

    AMF published the guideline on margins for over-the-counter (OTC) derivatives not cleared by a central counterparty (CCP). The guideline sets out expectations of AMF regarding the exchange of margin for non-centrally cleared OTC derivatives (covered derivatives). This guideline applies to a covered institution that trades covered derivatives with a covered counterparty. The effective dates of the expectations for the exchange of variation margin and initial margin are March 01, 2020 and September 01, 2021, respectively.

    As per the guideline, a local institution belonging to a financial group whose aggregate month-end average gross notional amount of outstanding covered derivatives for March, April, and May of a given year exceeds USD 12 billion becomes a covered institution as of September 01 of that year. From that date until August 31 of the following year, the guideline will apply to all new covered derivatives traded with a covered counterparty. However, AMF does not expect initial margin expectations to be met for existing covered derivatives. AMF expects all covered institutions to have appropriate margining practices in place for all covered derivatives traded with a covered counterparty, with the exception of:

    • physically settled foreign exchange forwards
    • cross-currency swaps
    • fixed physically settled foreign exchange transactions associated with the exchange of principal of cross-currency swaps

    Conversely, a covered institution belonging to a financial group whose aggregate month-end average gross notional amount of outstanding covered derivatives for March, April, and May of a given year falls below USD 12 billion ceases to be a covered institution. From that time on, the guideline will not apply to any covered derivative involving the institution, regardless of the date on which the derivative was traded, until such time as the institution has recovered its status as a covered institution. The same holds true for a covered counterparty.

     

    Keywords: Americas, Canada, Banking, Securities, OTC Derivatives, Non-Centrally Cleared Derivatives, CCPs, Margin Requirements, Initial Margin, Variation Margin, AMF

    Featured Experts
    Related Articles
    News

    EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA

    The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.

    May 11, 2022 WebPage Regulatory News
    News

    EC Mandates ESAs to Propose Amendments to SFDR Technical Standards

    The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.

    May 11, 2022 WebPage Regulatory News
    News

    EBA Examines Supervisory Practices, Issues Deposits Reporting Template

    The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),

    May 11, 2022 WebPage Regulatory News
    News

    US Agency Publications Address Basel, Reporting, and CECL Developments

    The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances

    May 09, 2022 WebPage Regulatory News
    News

    SEC Extends Comment Period on Climate Risk Disclosures

    The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.

    May 09, 2022 WebPage Regulatory News
    News

    APRA Reduces Committed Liquidity Facility, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.

    May 09, 2022 WebPage Regulatory News
    News

    CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks

    The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.

    May 06, 2022 WebPage Regulatory News
    News

    PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down

    The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.

    May 06, 2022 WebPage Regulatory News
    News

    EBA Updates Standards for 2023 Benchmarking of Internal Approaches

    The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.

    May 06, 2022 WebPage Regulatory News
    News

    EIOPA Responds to Stakeholder Views on Blockchain in Insurance

    The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.

    May 06, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8179