Joint Letter Requesting Suspension of Phase 5 and 6 of the Uncleared Margin Rules

On March 25, MFA and 16 other trade associations submitted a joint letter to the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) requesting that they issue an immediate, public recommendation to global regulators to suspend the compliance dates for Phase 5 and 6 of their uncleared margin rules, and that global regulators act swiftly to provide corresponding reassurance in their jurisdictions. The implementation dates for Phase 5 and Phase 6 are September 1, 2020 and September 1, 2021, respectively.  Members of the associations had previously expressed concern about timely implementation, which concerns have been exacerbated by the current COVID-19 situation.  In our letter, the associations enumerated reasons why COVID-19 has proven disruptive to market participants’ compliance efforts.  The associations did not specify how long the suspension should be, and instead, noted that the overall impact of COVID-19 may not be known for some time, and suggested that decisions regarding a new implementation timeline be reconsidered when relevant facts and circumstances are known.