The FCA welcomes the statements made by the European Supervisory Authorities and the International Organization of Securities Commissions on 23 February 2017.
The new regime for variation margin may require a number of significant changes for many firms, in terms of documentation and other arrangements.
We understand that some firms may not be in a position to exchange variation margin fully in compliance with the Regulatory Technical Standards by 1 March 2017 despite their efforts to date.
In our supervision of firms’ progress, we will take a risk-based approach and use judgement as to the adequacy of progress, taking into account the position of particular firms and the credibility of the plans they have made.
Where a firm has not been able to comply fully, we will expect it to be able to demonstrate that it has made best efforts to achieve full compliance, and be ready to explain how it will achieve compliance in as short a time as practicable for all in-scope transactions entered into from 1 March 2017. We will expect detailed and realistic plans to be in place, which we may request to see at any time.
We expect firms to have come into compliance within the coming few months.