This chapter sets out the transitional arrangements that apply to the margin requirements.

Version effective as of 03 Apr 2020

Transitional arrangements updated to reflect 3 April 2020 publication by BCBS and IOSCO.

Introduction

90.1 The requirements described in MGN should be phased in so that the systemic risk reductions and incentive benefits are appropriately balanced against the liquidity, operational and transition costs associated with implementing the requirements. In addition, the requirements should be regularly reviewed to evaluate their efficacy, soundness and relationship to other existing and related regulatory initiatives, and to ensure harmonisation across jurisdictions.

Transitional arrangements for initial margin

90.2 The requirement to exchange two-way initial margin with a threshold of up to €50 million will be staged as follows.

(1) From 1 September 2018 to 31 August 2019, any covered entity belonging to a group whose aggregate month-end average notional amount of non-centrally cleared derivatives for March, April, and May of 2018 exceeds €1.5 trillion will be subject to the requirements when transacting with another covered entity (provided that it also meets that condition).

(2) From 1 September 2019 to 31 August 2021, any covered entity belonging to a group whose aggregate month-end average notional amount of non-centrally cleared derivatives for March, April, and May of 2019 exceeds €0.75 trillion will be subject to the requirements when transacting with another covered entity (provided that it also meets that condition).