Derivatives end users are concerned about the impact of new margin requirements for non-cleared derivatives. A new survey by the International Swaps and Derivatives Association (Isda) shows that a third are unsure whether they will even have to comply with the rules.

Of the 36% that knew they would have to comply, nearly two thirds (65%) said they were concerned or somewhat concerned about their ability to meet the requirements.

“The survey results indicate that many market participants may struggle to meet the December 2015 effective date, especially given that a large number of end-user firms still appear unsure whether the rules apply to them,” said Scott O’Malia, Isda CEO.

The new rules will require most derivatives users to post initial and variation margin on non-cleared derivatives transactions. Regulators from the US, Europe and Japan released proposed requirements last year, but final rules have not yet been published.

Current proposals set a phase-in schedule for the posting of initial margin, starting with the largest derivatives users from December 2015 and extending through to December 2019. 

Variation margin posting is slated to begin for all eligible counterparties from December this year, requiring firms to make significant changes to systems, processes and documentation. 

“Once the margin rules are finalised, it is vital that market participants have sufficient time to allow for the legal, operational and technological enhancements necessary to effectively and safely implement these new requirements," said O'Malia

"That’s why Isda has recommended a longer, phased implementation schedule to accommodate the adoption of a transparent standard industry model and the necessary documentation to exchange collateral on a global basis.

"It is also important that there is consistency between the various sets of rules, particularly regarding which market participants must post and collect margin,” Mr. O’Malia added.