Upcoming Regulatory Deadline:

Starting March 1, 2017, many parties will become subject to mandatory margin rules imposed by U.S. Prudential Regulators1 and the Commodity Futures Trading Commission on registered swap dealers, security-based swap dealers, major swap participants and major security-based swap participants ("CSEs") with respect to uncleared swaps and security-based swaps. Consequently, all "financial end user" counterparties (i.e., the majority of private funds managed by asset managers) will in effect become subject to mandatory variation margin posting requirements beginning March 1, 2017 with respect to new transactions with CSEs entered into on or after that date (and legacy transactions with CSEs if amended on or after that date). Compliance with those requirements will likely require either the amendment of existing credit support annexes, the implementation of new credit support annexes, and/or the adherence to certain industry protocols published by the International Swaps and Derivatives Association.

Note the implementation date of the European Commission's corresponding rules regarding variation margin requirements for most counterparties is also expected to be on or before March 2017.