Dealers fear mix-and-match margining for cross-border swaps

National conflicts in margin rules can only be fixed via mutual recognition

patchwork
Patchwork process: non-equivalence may force parties to modify contracts

Basic differences in national rules on bilateral swap margining could force firms engaging in cross-border derivatives trades to apply the more stringent jurisdiction's regulation, dealers and lawyers are warning. That would drag more counterparties and products into the scope of the regime, which applies clearing-style safeguards to non-cleared trades.

The solution is for jurisdictions to mutually recognise each other's rules, but market participants fear these decisions will not happen in time

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