Margin requirements for non-centrally cleared – ACT position

IOSCO and BCBS (International Organization of Securities Commissions and Basel Committee on Banking Supervision ) have been consulting on Margin requirements for non-centrally cleared and the conclusions from this are expected to influence the rules that ESMA (European Securities and markets Authority) will recommend for application in Europe.

The ACT welcomes the exemptions for non-financial companies but is seeking clarity that this exemption does still apply for transactions between a financial party and a non-financial party. We question the need for initial margin in the context of bilateral collateral and in any case would resist any suggestion that one sided margin in favour of the financial side be imposed.

The ACT reminds regulators not to forget the final end customers of the financial services sector. In solving the problems of the financial system care should be taken to avoid leaving the customers unable to manage their risks.