ISDA, the Institute of International Finance, the Association for Financial Markets in Europe and the Securities Industry and Financial Markets Association have together published a letter to the chairs of the BCBS, FSB, CGFS, IOSCO and CPSS (the “five chairs”) in relation to the margin requirements for non-centrally cleared derivatives.

The letter states that the initial margin (IM) requirements do not appear to meet any objective cost-benefit analysis and that the requirements will not, as currently drafted, contribute to the shared goal of reducing systemic risk and increasing systemic resilience. The letter also sets out key concerns and urges BCBS-IOSCO to conduct another Quantitative Impact Study (QIS).

The letter also respectfully requests the chairs consider withdrawing or suspending any IM requirements until the consequences of such requirements have been fully analyzed and clarified.