Variation margin
WHAT IS THIS? Variation margin is a payment – typically made daily, in cash – to reflect changes in the market value of a trade, or portfolio of trades. In over-the-counter derivatives markets, variation margin is traditionally seen as a buffer against counterparty default; in listed derivatives, it is treated as settlement.
JFSA eases VM rules for cross-border trades
Japanese firms with non-compliant CSAs can trade with certain foreign counterparties from March 1
Regulators relent ahead of VM big bang
Firms with 'significant exposures' must stick to March 1 deadline, however
VM push fails to deliver cleaner CSAs
Dealers have softened stance on collateral terms as March 1 deadline approaches
Japan holds firm on VM deadline as Fed tracks progress
JFSA says no “strong reason” for delay; Bafin and Fed monitor developments
Banks get no relief from CFTC’s variation margin delay
No-action letter will benefit only a dozen or so swaps brokerages and energy firms
Forex swap margin treatment uncertain ahead of VM deadline
With one month to go, market participants are still unsure how to treat foreign exchange derivatives
Banks seek to pry open CCP black boxes
Clarity on model inputs may have averted Brexit chaos, FCMs claim
EU will stick to March 1 variation margin deadline
US regulators also unlikely to delay as a result, say dealers
Australian VM relief undermined by backloading rule
Trades entered during six-month transition period will need margin from September 1
OTC infrastructure service of the year: AcadiaSoft
Risk Awards 2017: Hub receives 10 million lines of data daily under new margin regime and it has big plans for the future
Clearing house of the year: LCH
Risk Awards 2017: CCP enjoys stellar year for volumes, and demonstrates willingness to adapt following Brexit stresses
Law firm of the year: Allen & Overy
Risk Awards 2017: Law firm played a key role in the struggle to meet the September 2016 margin deadline
LCH platform to provide risk calculations for margin hub
SwapAgent agrees to send standardised sensitivities for bilateral trades to AcadiaSoft for IM calls
Buy-side firms seek ‘urgent’ VM relief
Two-thirds of firms have not signed any CSAs that comply with the new rules
Non-cleared margin requirements: The top five considerations
Sponsored feature: TriOptima
VM rules may spark Asian migration away from EU/US banks
Six-month transition could make inter-Asian trades cheaper, but only if liquidity is sufficient
US dealers face trading lockout from small Japanese banks
Lack of substituted compliance for Japan's small bank margin rules causing concern
Systemic risks in CCP networks
Barker, Dickinson, Lipton and Virmani propose a credit and liquidity risk model for CCPs
Banks dismiss margin rule threat to synthetic prime brokerage
Growth in synthetic financing versus physical sees UBS, ING boost investment in prime brokerage units
Non-cleared margin – a timeline
Milestones in the development of margin requirements for non-cleared trades
Giancarlo: March VM deadline is ‘massive challenge’
CFTC commissioner calls on regulators to address buy-side concerns if needed
VM showdown a clash banks could not win
Clients clinging to hard-won CSA terms, in face of dealer calls for standardisation
Isda touts CSA standardisation in margining countdown
But scale of challenge becomes clear in early tussles between dealers and clients
Docs shock: how dealers are tackling the VM deadline
Scale and complexity of negotiations raise fears many will be unable to trade from March