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Millennium Global Investments Limited

Respondents are invited to comment on the proposal in this section concerning the treatment of non-financial counterparties domiciled outside the EU.
The requirement to post margin is unduly burdensome and onerous on pension funds and other institutional investors undertaking currency hedging. Furthermore it is at odds with international standards. In the United States, foreign exchange forwards and foreign exchange swaps have been exempted from regulation as “swaps” by the Secretary of the Treasury and therefore are not, and will not be, subject to margin requirements for uncleared swaps, absent Congressional action. The RTS would therefore require EU banks to exchange variation margin on foreign exchange forwards and foreign exchange swaps with a counterparty in a third country, when there is no such requirement imposed on banks established in the United States or elsewhere.
Please see the attached document "Millennium Global Investments Risk Mitigation Techniques for OTC Derivative Contracts not Cleared by a CPP.
Respondents are invited to comment on the proposal in this section concerning the timing of calculation, call and delivery of initial and variation margins.
Please see the attached document "Millennium Global Investments Risk Mitigation Techniques for OTC Derivative Contracts not Cleared by a CPP.
Respondent are invited to provide comments on whether the draft RTS might produce unintended consequence concerning the design or the implementation of initial margin models.
As above in the United States, foreign exchange forwards and foreign exchange swaps have been exempted from regulation as “swaps” by the Secretary of the Treasury and therefore are not, and will not be, subject to margin requirements for uncleared swaps, absent Congressional action. The RTS would therefore require EU banks to exchange variation margin on foreign exchange forwards and foreign exchange swaps with a counterparty in a third country, when there is no such requirement imposed on banks established in the United States or elsewhere. This would put EU banks at a competitive disadvantage. Furthermore, the requirement to post margin is unduly burdensome and onerous on pension funds and other institutional investors undertaking currency hedging, to the likely extent of discouraging some investors from undertaking this prudent risk management activity.
Contact name
Mark Astley