Transparency and responsiveness of initial margin in centrally cleared markets - review and policy proposals

Final report by the Basel Committee on Banking Supervision (BCBS), the BIS Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO).

This BCBS-CPMI-IOSCO report sets out ten final policy proposals which aim to increase the resilience of the centrally cleared market ecosystem in times of market stress. The report forms one element of a comprehensive approach jointly taken by the BCBS, the CPMI, IOSCO and the Financial Stability Board (FSB) to improving transparency, streamlining margin processes, increasing the predictability of margin requirements and improving the liquidity preparedness of non-bank market participants for margin calls. The report should be read alongside other closely related reports by the BCBS, the CPMI, IOSCO and the FSB (see links below).

The proposals in the report are designed to improve market participants' understanding of centrally cleared initial margin calculations and potential future margin requirements. They cover aspects of central counterparty (CCP) transparency, governance and review of initial margin models, as well as clearing member transparency for clients and CCPs. The final policy proposals have taken into account feedback from industry on the consultative report Transparency and responsiveness of initial margin in centrally cleared markets: review and policy proposals published in January 2024.

The policy proposals set out in the report build on the BCBS-CPMI-IOSCO report Review of margining practices published in September 2022. The September 2022 report recommended international policy work aimed at, among other things, evaluating the responsiveness of initial margin models and enhancing the transparency of margin requirements in centrally cleared markets. The policy proposals also took into account the findings of the BCBS-CPMI-IOSCO report Margin dynamics in centrally cleared commodities markets in 2022 published in May 2023.

The relevant standard setting bodies will consider how best to implement the ten proposals.