Regulatory Alerts2018-08-23
Management of Credit Risk Derived from Trading Activity of Customers in Derivatives and Securities
The Supervisor of Banks issued this directive to tighten requirements for banking corporations managing credit risk arising from customer trading in derivatives and securities. The regulation mandates robust corporate governance, comprehensive risk measurement including stress testing, and strict collateral policies, with specific provisions for customers engaging in speculative activity. It introduces mandatory initial and variation margin requirements for over-the-counter derivatives transactions, with an implementation deadline of July 1, 2018.
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