In response to numerous comments received from market participants and vendors, the LSTA released an update to its membership earlier this week postponing the effective date of the proposed requirements­based par/near par delayed compensation regime. The new delayed compensation provisions will no longer go into effect on Monday, July 18; instead, the new effective date will be September 1, 2016 with a phased in implementation process.

The LSTA indicated that the postponement would allow it to continue to work with market participants and vendors to resolve open operational issues and to work through some of the more thoughtful comments to the new delayed compensation provisions. The LSTA did not reveal any details as to the anticipated extent of the necessary revisions or the types of changes to be made, but only that they expect to release further information, as well as revised documentation, in the coming weeks. In the meantime, we have been hearing from many clients that they would welcome a delay in effectiveness of the new delayed compensation standards in order to have sufficient time to revamp their back office systems and procedures in advance of the market’s implementation of the new rules.