ISDA recently released its 2016 Credit Support Annex for Variation Margin for use with New York law.  The CSA for Variation Margin is the first in a series of documents that ISDA plans on publishing to assist market participants in complying with new margin requirements for uncleared swaps.

ISDA also anticipates publishing an English and Japanese version of the CSA for Variation Margin as well as CSAs for Initial Margin in the next couple months.  ISDA also plans on releasing a Protocol to facilitate the amendment of existing agreements to account for the new rules governing margin for uncleared swaps.

The first compliance date is September 1, 2016 for those counterparties with a combined average daily notional amount of $3 trillion in uncleared swaps, security based swaps, FX forwards and swaps during the months of March, April and May 2016.  As of September 1, 2016, CSEs, which include swap dealers and major swap participants, and counterparties (including their affiliates) meeting this threshold will need to exchange initial and variation margin.  The second compliance date is March 1, 2017 at which time all CSEs and counterparties will need to begin collecting and posting variation margin.  The remaining effective dates for initial margin are as follows: (i) September 1, 2017 for combined notional amounts of more than $2.25 trillion; (ii) September 1, 2018 for combined notional amounts of more than $1.5 trillion; (iii) September 1, 2019 for combined notional amounts of more than $0.75 trillion; and (iv) September 1, 2020 for all others.