Industry Groups Urge Extension of Initial Margin Implementation Deadlines
Industry associations, including ISDA and SIFMA, among many others, urged the Basel Committee on Bank Supervision and IOSCO ("BCBS-IOSCO") to issue a public recommendation to global regulators urging an extension of the implementation deadlines for the Phase 5 and Phase 6 initial margin requirements for uncleared derivatives.
In a joint letter, the trade associations stated that firms are "working diligently" to meet these deadlines, but do not believe firms will be able to meet them due to the global COVID-19 pandemic. The trade associations cited COVID-19 challenges including (i) limited access to legal and operational documentation due to staff working from home, (ii) minimal abilities to communicate with counterparties, (iii) a continually volatile market and (iv) staff compromised by illness.
BCBS-IOSCO had previously revised the phase-in of initial margin requirements to September 1, 2020 for Phase 5 firms and to September 1, 2021 for Phase 6 firms.
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