Joint Standard on Margin Requirements for non-centrally cleared OTC derivative transactions
The Financial Sector Conduct Authority and the Prudential Authority declare 16 August 2021 as the effective date for the joint standard relating to the margin requirements for non-centrally cleared over-the-counter derivative transactions (Joint Standard).
How will this date affect the phase in periods:
1. Any OTC derivative provider (ODP) and Counterparty pair who belong to a group of which the aggregate month-end average gross notional amount of OTC derivatives for March, April and May of 2020 exceeds R30 trillion, will have to start exchanging Variation Margin (VM) and Initial Margin (IM) on 16 August 2021.
2. The remaining ODPs and Counterparties will need to exchange VM from 16 February 2022 (being 6 months after the effective date).
3. The remaining IM phases will follow according to the Joint Standard prescribed phases.
A copy of the effective date notice is below: