Article: Final EU Margining RTS Published – Some Good, Some Bad.16 March 2016 | Peter Ten-Broeke
Final Margining RTS published – some good, some bad.
On 8 March, the ESAs – ESMA, EBA and EIOPA – after a few delays, published the long awaited final draft Regulatory Technical Standards (“RTS”) which set out the margining requirements mandated under EMIR for non-centrally cleared OTC derivatives. The RTS has now been submitted to the European Commission for its endorsement and the Commission will have three months to endorse the RTS or to endorse with amendments. Although the RTS is therefore by no means definitive, the general expectation is that there will be no material changes to the document. Where considered necessary there may (and likely will be) some informal advocacy by ISDA to the European Commission with a view to implementing minor changes. The settlement timeline for posting variation margin (VM) and initial margin (IM) is one of the main concerns and the intense lobbying with the regulators prior to publication of the RTS for more time than the “T+1” does not appear to have paid off.
Below, I will set out some of