Variation margin relief on forwards arrives, but anxiety persists

Letter fotolia
By Ross Lancaster
30 Nov 2017

European regulators have signalled their intention to grant non-institutions reprieve from variation margin requirements but with the clock ticking on the rule’s January 3 implementation date, those gunning for the exemption are still being kept on tenterhooks.

Last Friday, the European supervisory authorities (ESAs) announced that they would review the additional risks that posting daily variation margin could cause non-institutions that use physically settled FX forwards. After review, the ESAs will submit their draft amendments to the European Commission within one month.

While welcomed by ...

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