[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-1-en-105":3,"doc-seo-280599-105":53,"doc-detail-280599-en":127},{"code":4,"msg":5,"data":6},0,"success",[7,14,19,24,29,34,39,44,49],{"id":8,"doc_module":9,"doc_module_name":10,"category_name":11,"show_sort_weight":12,"slug":13},11,1,"Template","Presentations",90,"presentations",{"id":15,"doc_module":9,"doc_module_name":10,"category_name":16,"show_sort_weight":17,"slug":18},12,"Resumes",80,"resumes",{"id":20,"doc_module":9,"doc_module_name":10,"category_name":21,"show_sort_weight":22,"slug":23},14,"Invoices",70,"invoices",{"id":25,"doc_module":9,"doc_module_name":10,"category_name":26,"show_sort_weight":27,"slug":28},15,"Posters",60,"posters",{"id":30,"doc_module":9,"doc_module_name":10,"category_name":31,"show_sort_weight":32,"slug":33},16,"Social Media",50,"social-media",{"id":35,"doc_module":9,"doc_module_name":10,"category_name":36,"show_sort_weight":37,"slug":38},17,"Forms",40,"forms",{"id":40,"doc_module":9,"doc_module_name":10,"category_name":41,"show_sort_weight":42,"slug":43},18,"Letters",30,"letters",{"id":45,"doc_module":9,"doc_module_name":10,"category_name":46,"show_sort_weight":47,"slug":48},21,"Paper Templates",5,"papers-templates",{"id":50,"doc_module":9,"doc_module_name":10,"category_name":51,"show_sort_weight":4,"slug":52},158,"General","general-158",{"code":4,"msg":54,"data":55},"ok",{"site_id":56,"language":57,"slug":58,"title":59,"keywords":60,"description":61,"schema_data":62,"social_meta":120,"head_meta":122,"extra_data":124,"updated_unix":126},105,"en","lessons-from-the-latest-phase-of-initial-margin-regulation-preparation-considerations","Lessons from the Latest Phase of Initial Margin Regulation - Preparation Considerations","","The paper reviews how initial margin requirements for uncleared trades have expanded since September 1, 2016, culminating in Phase 4 on September 1, 2019 for counterparties with aggregate average notional amount above $750 billion. It summarizes the operational preparations firms undertook, explains why immediate margin exchange is often delayed, and outlines practical guidance for upcoming Phase 5 and Phase 6 deadlines. Key topics include AANA calculation, scope self-disclosure, risk-based versus grid-based initial margin methods, collateral segregation approaches, and operational systems needed to avoid non-compliance and trading disruption.",{"@graph":63,"@context":119},[64,80,102],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":11,"@type":70,"position":76},"https://docshare.wps.com/template/presentations/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/lessons-from-the-latest-phase-of-initial-margin-regulation-preparation-considerations/280599/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/lessons-from-the-latest-phase-of-initial-margin-regulation-preparation-considerations/280599.png","ImageObject",442,249,{"name":88,"@type":89},"Mali","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/pdf","2026-10-20","2026-09-16",true,{"@type":98,"interactionType":99,"userInteractionCount":101},"InteractionCounter",{"@type":100},"ViewAction",9,{"@type":103,"mainEntity":104},"FAQPage",[105,111,115],{"name":106,"@type":107,"acceptedAnswer":108},"What changed with Phase 4 of initial margin regulation on September 1, 2019?","Question",{"text":109,"@type":110},"Phase 4 required counterparties to calculate and exchange initial margin when trades have aggregate average notional amount (AANA) over $750 billion.","Answer",{"name":112,"@type":107,"acceptedAnswer":113},"Why do many firms not start exchanging initial margin immediately even after the deadline?",{"text":114,"@type":110},"Two reasons are emphasized: only trades entered into or amended after the deadline are covered, and the margin requirement must exceed $50 million (or a lower agreed threshold) which may not be met right away.",{"name":116,"@type":107,"acceptedAnswer":117},"What are the main approaches for calculating initial margin mentioned in the paper?",{"text":118,"@type":110},"The paper contrasts risk-based methodology with a grid-based method, and notes ISDA’s Standard Initial Margin Model (SIMM) as a standardized form supporting consistent risk-based calculation.","https://schema.org",{"og:url":78,"og:type":121,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":123,"canonical":78},"index,follow",{"doc_id":125,"site_id":56},280599,1791661364,{"code":4,"msg":5,"data":128},{"doc_id":125,"user_id":129,"nickname":88,"user_avatar":130,"doc_module":9,"category_id":8,"category_name":11,"doc_title":59,"doc_description":61,"doc_content":131,"file_id":132,"file_url":133,"file_type":134,"file_size":135,"view_count":101,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":76,"language":136,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":137,"faqs":138,"seo_title":139,"seo_description":61,"update_tm":140,"read_time":9},2336475104362,"https://ap-avatar.wpscdn.com/avatar/22000c4c46a41b752dd?x-image-process=image/resize,m_fixed,w_180,h_180&k=1786595829695023868","Lessons from the Latest Phase of Initial Margin Regulation  \nBy Vivek Agarwal  \nInitial margin requirements for uncleared trades were brought into effect on September 1, 2016, and started with a few large financial institutions in the scope of the regulation. Each year, these requirements have been aggressively enforced upon other financial institutions.  \nSeptember 1, 2019, marked the Phase 4 of initial margin regulation, meaning that counterparties are required to calculate and exchange initial margin if they have trades with an aggregate average notional amount (AANA) over $750 billion. From the institutional perspective of those covered in this phase, this deadline is a test for its yearlong preparation.  \nEfforts included contract repapering, negotiating new custodian relationships and implementing infrastructure to calculate initial margin – as well as changes to margin workflow, changes to collateral movement and settlement systems, and drafting new reports.  \nAlthough the requirements are enforced, the outcome of these preparations will not be known until a few months from now. Most firms are not likely to start exchanging initial margin immediately for two reasons. The first is that only those trades that entered into or amended after the deadline are covered by the regulation. The second is that margin requirement needs to exceed $50 million, or the agreed threshold if lower than that amount, which might not happen immediately.  \nHere are several considerations that firms covered in phase 5 and phase 6 may find beneficial in preparation for their respective deadlines.  \nCalculate AANA  \nCalculating AANA (aggregate average notional amount) is the first step towards initial margin compliance. It is an average of total notional of in-scope trades over the specified period. It may seem simple, but complications can begin with identifying in-scope trades across all the legal entities within the firm. Separately, the definition of notional for some exotic derivatives might not be straightforward. This exercise needs to be done often to ensure the regulatory threshold is not breached as the business grows.  \nSelf-Disclosure  \nBased on the AANA calculation exercise, firms are required to disclose if they expect to be in scope for the September 2020 or September 2021 deadline. The buy-side firms who audit the scope may be asked to provide information for the dealers to confirm this determination. This can be a burden when a buy-side firm is working with multiple dealers through many investment managers.  \nTo ease this burden, the International Swaps and Derivatives Association (ISDA) has published a self-disclosure letter template to assist with this process. Additionally, ISDA frequently conductsa voluntary multilateral disclosure exercise to provide the industry transparency into the inscope counterparties early as well as other useful information like the choice of the custodian and whether they are going to tap a third party or a tri-party model.  \nRisk-based Methodology for Initial Margin Calculation  \nUncleared margin rules require a risk-based methodology to calculate the initial margin. Specifically, firms should be able to demonstrate the value of risk coverage over 10 days with 99% confidence. Another alternative is that firms can choose a grid-based method under which the initial margin is calculated as a percentage of notional where the percentage depends on the asset class and duration.  \nThe grid-based method is simpler to calculate, however, the initial margin amount calculated based on the grid may turn out to be five to ten times the amount calculated by risk-based methods. There is also an apprehension in the market that buy-side firms choosing the grid methodology may receive unfavorable prices from their dealers further increasing the overall cost of a trade.  \nISDA has published a standardized form of the risk-based model named Standard Initial Margin Model (SIMM) . The model simplifies the calculation an","cbCairBv9tAkltD7","https://ap.wps.com/l/cbCairBv9tAkltD7","pdf",159118,"English","# Lessons from the Latest Phase of Initial Margin Regulation\n## Compliance timeline and preparation scope\n## Calculate AANA\n## Self-disclosure process\n## Risk-based methodology for initial margin calculation\n## Posting collateral in a segregated account\n## How to move forward","[{\"question\":\"What changed with Phase 4 of initial margin regulation on September 1, 2019?\",\"answer\":\"Phase 4 required counterparties to calculate and exchange initial margin when trades have aggregate average notional amount (AANA) over $750 billion.\"},{\"question\":\"Why do many firms not start exchanging initial margin immediately even after the deadline?\",\"answer\":\"Two reasons are emphasized: only trades entered into or amended after the deadline are covered, and the margin requirement must exceed $50 million (or a lower agreed threshold) which may not be met right away.\"},{\"question\":\"What are the main approaches for calculating initial margin mentioned in the paper?\",\"answer\":\"The paper contrasts risk-based methodology with a grid-based method, and notes ISDA’s Standard Initial Margin Model (SIMM) as a standardized form supporting consistent risk-based calculation.\"}]","Lessons from the Latest Phase of Initial Margin Regulation - Preparation Considerations | PDF",1789552093]