Total Derivatives
Operational challenges for banks for uncleared derivatives
By Ying Luthra
August 1, 2016

As the implementation date for margining on uncleared derivatives approaches for MSP on September 1st, Christina Norland, head of global regulatory practice at Chatham Financial, says “there’s still a lot of work to be done” as the deadline would likely “hold firm.” Aside from documentation changes, she saw that banks are working on getting their various models approved by regulators and that the process of preparing “is going straight to the deadline.” Meanwhile, the EU is delaying its implementation date (some say to March 2017), and Norland found that participants are wondering “what kind of impact with the EU not being on line?” will have. As for end users, the usage of derivatives continues to be put under close scrutiny as far as cost effectiveness and Norland found that Chatham’s clients “are looking and evaluating which is the least expensive” and noted that in a recent Chatham webinar survey that some clients “are considering not hedging at all.”
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