On Friday, April 3, BCBS/IOSCO announced a proposal to defer by one year each of the final implementation phases of the regulatory initial margin requirements. This is in response to a letter sent recently to BCBS/IOSCO by the primary industry groups (including ISDA, AIMA, MFA, EFAMA and SIFMA AMG), describing the impact of the COVID-19 pandemic on firms’ preparations for implementation of these requirements.

It is expected that regulators in the U.S. and the EU will follow this guidance and amend their respective rules to accommodate a deferral. Assuming they do so, Phase V implementation would be delayed until September 1, 2021, and Phase VI implementation would be delayed until September 1, 2022.

We will continue to monitor any developments related to the implementation of regulatory initial margin and update our clients and friends as necessary.

If you have any questions concerning the foregoing, please contact Miki Navazio (navazio@sewkis.com; 212-574-1404) or Lauri Goodwyn (goodwyn@sewkis.com; 212-574-1249) in Seward & Kissel’s Derivatives and Trading Practice Group, Daniel Bresler (bresler@sewkis.com; 212-574-1203) or your primary attorney.

Seward & Kissel has established a COVID-19 Resource Center on our web site to access all relevant alerts that we distribute.