Joint Comment Letter Responding to PRA/FCA Consultation on Margin Requirements for Non-centrally Cleared Derivatives

[34305]

October 7, 2022

TO: Derivatives Markets Advisory Committee
Global Regulated Funds Committee
UK-EU Cross Border Task Force RE: Joint Comment Letter Responding to PRA/FCA Consultation on Margin Requirements for Non-centrally Cleared Derivatives

 

On 3 October, ICI co-signed a letter with several associations (the Associations)[1] in response to a consultation by the Prudential Regulatory Authority of the Bank of England (PRA) and the Financial Conduct Authority (FCA).[2] The consultation sought comments on the proposal to amend on-shored Technical Standards relating to margin requirements for non-centrally cleared derivatives.

The Associations supported PRA/FCA's proposal to extend the list of eligible collateral to include qualifying non-UK funds, including money market funds. The Associations also supported introducing transitional provisions where counterparties become subject to margin requirements for the first time due to a change in status of a counterparty or a change in the netting status of a relevant jurisdiction.

ICI previously co-signed a joint associations letter on 15 April 2021 urging the PRA and FCA to permit the use or European Economic Area (EEA) UCITS as collateral for initial margins purposes.[3] The UK authorities' proposal goes further and extends the list to include qualifying non-UK funds, which the Associations support.
 

Corrado Camera
Director, Public Policy and Regulation, ICI Global
 

Notes

[1] The letter was signed by ICI, the Institutional Money Market Funds Association (IMMFA), the International Swaps Derivatives Association (ISDA), the Asset Management Group of the Securities Industry and Financial Markets Association (SIFMA AMG), and UK Finance.

[2] See CP11/22 - Margin requirements for non-centrally cleared derivatives: Amendments to BTS 2016/2251 (12 Jul. 2022).

[3] See ICI Memorandum No. 33493 (23 Apr. 2021).