By Karen Butler Vanessa Docherty King & Wood Mallesons’ London office

butler-libdeh_kdocherty_vOn 28 July 2016 the European Commission endorsed, with amendments, the draft rules on margin requirements for non-cleared OTC derivatives contracts (“Margin RTS”). The margin rules are designed to prevent the build-up of uncollateralised exposures by requiring certain counterparties to post initial margin and variation margin.

The date on which counterparties will be required to comply with the margin rules will depend on the aggregate notional amount of non-centrally cleared derivatives trades that have been entered into, with the application of the margin rules determined as at the “date of inception” of the derivatives contract (please see our previous alert for further details).

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