September 13, 2019

Secretariat of the Basel Committee on Banking Supervision Bank for International Settlements
Secretariat of the International Organization of Securities Commissions
Board of Governors of the Federal Reserve System
European Banking Authority
European Central Bank
European Commission
European Securities and Markets Authority
Farm Credit Administration
Federal Deposit Insurance Corporation
Federal Housing Finance Agency
Financial Conduct Authority
Office of the Comptroller of the Currency
U.S. Commodity Futures Trading Commission
U.S. Department of the Treasury
U.S. Securities and Exchange Commission
Australian Prudential Regulation Authority
Brazil National Monetary Council
Canada Office of the Superintendent of Financial Institutions
Central Bank of Brazil
Central Bank of Ireland
Hong Kong Monetary Authority
Japan Financial Services Agency
Luxembourg Commission de Surveillance du Secteur Financier
Monetary Authority of Singapore
Korean Financial Supervisory Service
Swiss Financial Market Supervisory Authority
South African Prudential Authority
South African Financial Sector Conduct Authority

Re: Margin Requirements for Non-Centrally Cleared Derivatives – Remaining Stages of Initial Margin Phase-In

Dear Sirs and Madams:

The Asset Management Group of the Securities Industry and Financial Markets Association (“AMG”)1 is writing in regards to several scoping and implementation issues that asset managers and their clients are facing in the remaining phases of the implementation of initial margin (“IM”) requirements for non-centrally cleared derivatives (commonly referred to as the “Uncleared Margin Rules” or “UMRs”).

We support the recent July 23, 2019 joint statement of the Basel Committee on Banking Supervision (“BCBS”) and the International Organization of Securities Commissions (“IOSCO”) (the “July 23, 2019 Statement”) recommending extending implementation of the remaining phases of the UMRs (by splitting Phase V into two phases). We encourage global regulators to adopt the July 23, 2019 Statement for regulatory certainty and clarity.2 In particular, and consistent with the July 23, 2019 Statement, an intermediary phase-in period between Phase IV and Phase V set at an amount above EUR/USD 50 billion3 would allow market participants and regulators to assess and hopefully address difficulties in implementation prior to the rush of counterparties coming within scope at the EUR/USD 8 billion threshold,4 and would allow for the tapered development of market infrastructure necessary for successful compliance.

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1 SIFMA AMG brings the asset management community together to provide views on U.S. and global policy and to create industry best practices. SIFMA AMG’s members represent U.S. and global asset management firms whose combined assets under management exceed $45 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds.
2 We applaud the Farm Credit Administration, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Office of the Comptroller of the Currency (U.S. Department of the Treasury), the Board of Governors of the Federal Reserve System