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Swap Collateral Documentation and the New Final Margin Regulations for Uncleared Swaps

Preparing for Profound Changes to Swap Activities, Revising Collateral Documentation to Comply With New Rules

Recording of a 90-minute premium CLE webinar with Q&A

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Conducted on Thursday, September 29, 2016

Recorded event now available

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This CLE course will analyze the newly finalized regulations regarding uncleared swap margin requirements, how the new changes impact the ability of financial institutions to enter into over-the-counter swaps generally, and how collateral documentation will need to be revised to ensure that derivative relationships comply with the final rules. The program will also discuss the ISDA’s newly revised forms of Credit Support Annex (CSA) and related documents used in conjunction with ISDA Master Agreements.

Description

Starting Sept. 1, 2016, the final margin rules for uncleared swaps will be effective with staggered compliance dates through Sept. 1, 2020. The final rules will have a profound impact on the ability of financial institutions, funds and securitization vehicles to engage in investment and hedging activities and may increase the cost of these activities.

Entities subject to the new margin rules and their bank counterparties may need to revise collateral documentation, such as the CSA, to ensure these relationships comply with the rules.

Earlier this year, the ISDA published new versions of its Credit Support Annex to help market participants comply with the new margin requirements. ISDA has published New York law and English law versions of the 2016 Credit Support Annex for Variation Margin. ISDA has also published a Phase One Credit Support Annex for Initial Margin (New York law) and Phase One IM Credit Support Deed (English law). Additionally, ISDA has published the 2016 Variation Margin Protocol and Regulatory Margin Self-Disclosure Letter in order to facilitate the implementation of the regulatory requirements into market participant’s documentation. Further ISDA documents to facilitate compliance will be forthcoming.

Listen as our authoritative panel of finance attorneys guides you through the newly finalized regulations regarding uncleared swap margin requirements and discusses how the new rules will impact swap and hedge activities of financial institutions and entities. The panel will analyze how collateral documentation will need to be revised to ensure compliance of derivative relationships with the new margin rules.

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Outline

  1. Overview of new regulation
    1. Covered entities
    2. New margin requirements
    3. Cross-Border Application of Margin Requirements
  2. Impact on swap documentation between covered entities and their swap counterparties
    1. General Considerations
    2. ISDA Documentation and Protocol
      1. New 2016 Credit Support Annex for Variation Margin
      2. Phase One Credit Support Annex for Initial Margin
      3. Variation Margin Protocol
      4. Regulatory Margin Self-Disclosure Letter

Benefits

The panel will review these and other key issues:

  • The impact of the new margin rules on the ability of financial institutions, funds and securitization vehicles to engage in hedging activities
  • Revisions to collateral documentation that covered entities and their bank counterparties must make to ensure their relationships comply with the new rules
  • ISDA’s new versions of the CSA to help market participants comply with the new margin requirements

Faculty

Conrad G. Bahlke
Conrad G. Bahlke

Partner
Stroock & Stroock & Lavan

Mr. Bahlke practices in the areas of derivative transactions, commodities regulation and banking regulation, and heads...  |  Read More

Claire L. Hall
Claire L. Hall

Partner
DLA Piper

Ms. Hall has significant experience representing financial institutions, hedge funds, private equity firms,...  |  Read More

Yvette D. Valdez
Yvette D. Valdez

Counsel
Latham & Watkins

Ms. Valdez specializes in the representation of dealers, broker-dealers and end-users in connection with derivatives...  |  Read More

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