The Trade’s sister publication Global Custodian catches up with Michael Albanese, global head of collateral management at JP Morgan, to discuss the impact of IM and VM requirements, the changing definition of ‘optimal collateral’ and the future for the collateral management space.
Variation margin rules will go live globally from 1 March 2017 for all firms trading derivatives, regardless of size.
Major market infrastructure changes are needed for traders to deal with stricter collateral rules for OTC derivatives.
The partnership will enable the platform to connect clients to tri-party agents and CCPs.
LCH has expanded into new territory with a service to put it at the centre of the non-cleared derivatives market.
Futures exchanges are hoping stricter collateral rules on OTC derivatives will encourage market participants to migrate to cleared derivatives services.
Banks may struggle to update their collateral systems if the EU fast-tracks implementation of the initial margin rules.
Law firm Linklaters anticipates the rules could come into force by mid November if the EC accelerates implementation.
The platform executed its first collateral transaction on 6 October between a UK pension fund and CME Clearing Europe.
The European Commission has adopted the initial margin rules, which is set to come into force in January 2017.