Local Asian custodians not ready for IM phase five

Banks’ sluggish preparations for initial margin rules could hit buy-side clients

As firms in Asia look ahead to the final stage of non-cleared margin rules, due to take effect in September 2020, bankers are raising the alarm over the lack of preparations among local custodians to handle the anticipated uplift of collateral flow from smaller, regional clients.

“I don’t think there’s too many sub-custodians out there who can offer any form of initial margin segregation for these rules,” says a former Asian head of collateral at a global bank. “They may be able to offer margin