Margin Reform Monthly - July 2022
Margin Reform
? Management Consultants ? Educators ? Buy-Side, Sell-Side & FinTechs ? Margin and Collateral Front to Back Solutions ?
Welcome back to our newsletter (MRM3). We hope you are enjoying the summer and get a chance to finally go away and recharge with loved ones!
?If you need some extra reading, something new to learn or want to watch videos, then we have put together a mixture of good content we hope you like.?
?I’m Chetan Joshi, the Founder and COO of Margin Reform; please feel free to connect with me and our CEO Shaun Murray on LinkedIn.?
?If you have any questions on the content of MRM3 or anything else you would like to discuss in the collateral, margin or legal domain, please drop me a line or call me at +44 (0) 7947 276 667. I’d be happy to hear from you.?
Best,
Chetan?
This Month at Margin Reform
Getting ready for Uncleared Margin Rules (UMR)?
Regulatory Updates
The global regulators have been busy this summer...
Are you ready to deal with all this regulatory change coming in 2022 and 2023?
? European Union
EMIR Review: Several items will impact Uncleared Margin Rules (UMR), including Money Market Fund rules and treatment of AlFs/UCITS funds. SIMM Model governance RTS is still due by EU regulators towards the end of 2022. The industry has provided significant feedback on the initial consultation.TBA's - ESMA recently confirmed TBAs should be treated as derivatives under EMIR. Does this change your approach??
? China
Netting rules are turning on from 1st Aug 2022, and a number of counterparties (currently exempt under the UMR?2.5% non-netting jurisdictions rule) will be requiring VM and IM legal repapering and margin and collateral capabilities. Will, the industry get a further six months after their Legal teams complete their impact analysis???
? India
Variation Margin rules will live this Dec'22. Their Initial Margin rules are under consultation with small differences from previous rules firms. Are you aware of the custodian challenges onshore in India??
? United Kingdom
SIMM Model: The PRA is concerned with the adequacy of margining frameworks for UMR. Category 1 banks have actions listed in a letter sent in June, which they need to act by the latest Dec 2022
UK Margin Rules: PRA has issued a consultation on the UK margin rules for implementation by Dec 2022. Fundamental changes are to eligible collateral - allowing a broader set of MMFs to be acceptable under UK rules, and 6 month transition period is proposed for counterparties to change classification (e.g. NFC- to NFC+).
Latest on the Blog
In this article our CEO, Shaun Murray and Guest writer Geoff Robinson (formerly with Likezero), explain how financial markets can learn from a highly engineered team sport like F1. Read the full article here >>
领英推荐
?Industry Readiness on Phase 6 UMR
Our COO, Chetan Joshi and co-panels share experiences on initial margin implementation, including highlighting the key steps and issues and what we can learn from Phases 1-5, on this discussion co-hosted by Linklaters & HSBC
Main highlights in the discussion are:?
?0:00 - Introduction
00:58 to 03:56 - Self-disclosure
08:58 to 12:40 - Client Engagement & Rule Distillation
12:41 to 14:44?- Investment Managers
15:00 to 18:35 - Thresholds
18:35 to 23:00 - Threshold Monitoring
24:05 to 26:07 - Soft & Hard limits on Thresholds
27:20 to 29:14 - Threshold and AANA views from the US?
29:30 to 33:13 - Third Party vs Tri-party Party Custodians
35:33 to 37:10 - New Custodians
37:10 to 40:37 - Create IQ & ACAs
40:47 to 42:40 - Executing Documents?
43:35 to 46:26 -?Sticky points in negotiations
48:21 to 52:17 - Legal Opinions
52:22 to 55:20 - IM Model Governance
55:22 to 59:15 - Termination Currency
We are offering a 15% Discount this Summer on our Introduction to Collateral Management and One-to-One coaching (2 hours). A comprehensive, interactive course teaching you everything you need to know as a beginner to collateral management combined with two hours of 1:1 coaching