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Uncleared Margin Rules: Now Is the Time to Act..... or Risk Being Cut Off From OTC Derivatives Counterparties

Regulators globally are phasing in the Uncleared Margin Rules (UMR) — post-financial crisis regulations requiring margin to be posted on certain common derivatives. In 2022, many buy-side financial institutions and their counterparties will need to comply with UMR for the first time. The rules mandate complex calculations, counterparty agreements and custodial requirements.

If you have not yet established the necessary procedures and relationships, doing so in Q1 of 2022 is an urgent imperative. Although the deadline is rapidly approaching many firms remain unprepared, and regulators expect bottlenecks as firms negotiate compliance. Non-compliant firms risk being cut off from their counterparties.

This document — intended for US investors — answers common questions, helps firms comply efficiently, and discusses the benefits of Treasury-only money funds as a form of collateral.

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