Global Regulators Said to Weigh Delay of Derivative Margin RulesJim Brunsden and Silla Brush
Global regulators may delay rules to reduce market risk by requiring banks to hold collateral against uncleared swaps from fully taking effect until 2019, according to two people with knowledge of the discussions.
The Basel Committee on Banking Supervision will seek additional comments this year on a new draft of collateral rules for companies including JPMorgan Chase & Co. and Deutsche Bank AG, according to three people who requested anonymity because the process is private.
The final document, originally scheduled for publication by the end of 2012, will now come later this year. And the measure may phase in the rules’ implementation between Jan. 1, 2015 and Jan. 1, 2019, according to two of the people.
U.S. and European Union regulators are struggling to align rules for the $639 trillion market for over-the-counter derivatives, which became a target for tougher oversight after the 2008 collapse of Lehman Brothers Holdings Inc. The Basel committee has already issued rules that would more than triple the capital banks must hold to protect against losses.
Regulators have said that the draft collateral rules would prevent companies from exploiting rule differences between nations. Last year’s paper set out a partial list of assets that can count as collateral, including gold and some equities.
That draft version also set out approaches for calculating the writedowns that should be applied to these securities.
The Basel committee is working on the collateral rules with the International Organization of Securities Commissions.
The committee, which is headquartered at the Bank for International Settlements, includes regulators from 27 nations including the U.S., U.K. and China.
Madrid-based IOSCO brings together national market regulators from more than 100 countries to coordinate rules and share information.