The International Swaps and Derivatives Association, Inc. (ISDA) has published the first in a series of documents to help market participants comply with new margining requirements for non-cleared derivatives.
The new document – the 2016 Credit Support Annex for Variation Margin for use with New York law – will allow parties to negotiate collateral terms that comply with variation margin requirements under the new rules. The margining framework for non-cleared derivatives was developed by the Basel Committee on Banking Supervision and the International Organization of Securities Commissions, and will become effective for the largest derivatives users from September 1, 2016. For other entities within the scope of the regulations, initial margin requirements will be phased in over a four-year period, but variation margin obligations will come into force from March 1, 2017.
The 2016 Credit Support Annex for Variation Margin is available on the ISDA website.