Ucits’ clash with IM rules could cause collateral damage

Strict collateral reuse guidelines may restrict popular investment vehicles’ hedging capabilities

Ucits-bans-collateral-reuse

The sixth and final implementation of the non-cleared margin rules could create a hedging dilemma for popular European investment vehicles, as new requirements to collateralise over-the-counter derivatives might clash with longstanding investor protection rules aimed at fostering liquidity.

The existing Ucits guidelines governing more than €8 trillion of assets under management largely ban the reuse of collateral. This means that variation margin received on in-the-money derivatives hedges

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

If you already have an account, please sign in here.

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: