International Organization of Securities Commissions joins BCBS and CPMI to publish final reports on improving initial and variation margin in cleared and non-cleared markets

The International Organization of Securities Commissions (IOSCO), alongside the Basel Committee on Banking Supervision (BCBS) and the BIS Committee on Payments and Market Infrastructures (CPMI), published three final reports setting out proposals, practices and recommendations to improve transparency, streamline margin processes and increase the predictability of initial and variation margin requirements across centrally cleared and non-centrally cleared markets. For centrally cleared markets, one report sets out 10 final policy proposals for central counterparties and clearing members aimed at improving understanding of initial margin requirements and model responsiveness through greater transparency, with an accompanying cover note summarising consultation feedback. A separate CPMI-IOSCO report provides eight examples of effective practices for streamlining variation margin, framed as ways to meet the CPMI-IOSCO Principles for financial market infrastructures and related guidance, with a focus on better liquidity preparedness for above-average variation margin calls and more efficient collection and distribution. For non-centrally cleared markets, a BCBS-IOSCO report makes eight recommendations to firms intended to promote wider adoption of good practices to streamline variation margin processes and increase the responsiveness of initial margin models. The standard-setting bodies indicated they will consider how best to implement the centrally cleared initial margin proposals.