Response to second Joint Consultation on draft RTS on risk-mitigation techniques for OTC-derivative contracts not cleared by a CCP

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Respondents are invited to comment on the proposal in this section concerning the timing of calculation, call and delivery of initial and variation margins.

While the extension of the phase-in requirements for initial and variation margin is welcome, Adrian Lee & Partners strongly disagrees with Article 5 GEN which exempts FX Forwards and FX Swaps from initial margin only. The firm proposes that Article 5 GEN be amended to exempt such instruments from the requirement to collect variation margin in addition to the exemption for initial margin. Please see the attached for further details.

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Adrian Lee & Partners