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Adrian Lee & Partners

The proposed collateral requirements would lead to a significant increase in the costs of trading and would impose significant operational demands on end users such as pension funds and other long-term institutional investors. The requirements are inconsistent with BCBS-IOSCO guidance and are in direct contrast to the requirements of the Dodd-Frank Act. Please see the attached document for further detail.
As per the above, requiring pension funds and other long-term institutional investors to post and collect margin on foreign exchange forward contracts and foreign exchange swaps imposes significant operational as well as cost demands, as well as being inconsistent with BCBS-IOSCO guidance and the Dodd-Frank Act. A potential solution would be to limit the requirements to post and collect margin to contracts between banks and counterparties that are financial institutions and systemically important non-financial entities, defined so as to exclude pension funds and other long-term institutional investors. Please see the attached document for further detail.
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Kevin Mahon
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