Some smaller firms have accepted they will not get the documentation completed in time and have developed contingency plans instead. Chris Bender, a director in the global regulatory solutions team at hedging advisory firm Chatham Financial, says clients are falling into two buckets in how they are preparing for March 1. “Our clients who are using a rolling forward strategy are planning to roll those trades in February because they anticipate there will be a bottleneck in March. So we expect to see a lot of trading activity towards the end of the month. For those clients that don’t have trades coming up in the near future, they are sitting tight for now and waiting for a lot of the bottleneck to clear before amending their documentation. Or, if they have to trade, they are planning to execute products out of scope of the margin rules, like deliverable forwards or spot for currency trades,” he says.
Japan holds firm on VM deadline as Fed tracks progress
February 15, 2017