Regulatory Alerts2025-04-30
Joint Communication 1 of 2025: Eligible Non-Cash Collateral and Risk Management Measures for OTC Derivative Margin Requirements
The Financial Sector Conduct Authority and Prudential Authority have formally expanded eligible non-cash collateral to include United States, United Kingdom, and European Central Bank government bonds for satisfying margin obligations under Joint Standard 2 of 2020. These foreign sovereign instruments must carry credit ratings from International Organization of Securities Commissions member agencies and are subject to specified risk management, internal control, and assurance requirements. Following a successful consultation process that required no substantive amendments, the Authorities have implemented these collateral expansions and risk protocols for non-centrally cleared over-the-counter derivative transactions.
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