The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

ISDA Variation Margin Protocol Deadline Nears

Smaller asset managers and funds may have a harder time than their larger counterparts with preparing to follow a variation margin protocol that takes effect on March 1, according to an attorney specializing in derivatives markets standards.

The protocol issued by the International Swaps and Derivatives Association (ISDA) in August 2016 sets rules for contract documentation with multiple counterparties and changes to existing collateral agreements.

“Larger asset managers and funds will have an easier time communicating between the dealers to get agreements in place,” says Kristin Boggiano, a managing partner at Guggenheim Partners Investment Management, who spoke at the SEFCON event hosted by the Wholesale Markets Brokers’ Association on January 18. “My concern is more that the smaller entities may not get the first call.”

The administrative burden for compliance with ISDA’s variation margin protocol is a “serious concern,” with March 1 being less than 30 business days away, adds Boggiano. “Most entities are not using a common standard approach,” she says. “This means they have to do bilateral negotiations. If each fund has 15 dealers, they have to negotiate with each of those dealers based on their individual profiles.”

More generally, a concern for swap execution facilities (SEFs, as in the title of the SEFCON event), is missing out on liquidity providers or market makers that cannot interact because of protocol issues, says Michael O’Brien, vice president and global head of trading, Eaton Vance. As a result, there is a need for new trading protocols, according to O’Brien.

Such protocols or “innovations in the trading landscape will allow buy-side firms to be price makers as well as price takers,” he says.

Related content


Recorded Webinar: The evolution of market surveillance across sell-side and buy-side firms

Market surveillance is crucial, and in many cases a regulatory requirement, to ensuring orderly securities markets and sustaining confidence in trading. It can be breached and has become increasingly complex in the wake of the Covid pandemic, Brexit, and the emergence of new asset classes. This webinar will review the extent of market abuse in...


SGX Partners DataBP to Power Own Brand Market Data Licensing and Usage Portal

Singapore Exchange (SGX) has partnered DataBP, provider of a market data administration platform and services for exchanges, index and data providers, to use the latter’s platform and commercial expertise to roll out SGX Data Direct, an SGX-branded online portal for data licensing and usage reporting powered by DataBP. SGX joins a community of exchanges using...


A-Team Innovation Summit London

The Innovation Summit will showcase the latest cutting edge and state of the art technology and data driven innovations taking place in capital markets and will explore progress in shifting to digital and agile operating models, to enable transformative change, faster speed to market and a competitive edge.


Trading Regulations Handbook 2021

In these unprecedented times, a carefully crafted trading infrastructure is crucial for capital markets participants. Yet, the impact of trading regulations on infrastructure can be difficult to manage. The Trading Regulations Handbook 2021 can help. It provides all the essentials you need to know about regulations impacting trading operations, data and technology. A-Team Group’s Trading...