Phase 6 regulatory initial margin: key considerations

Phase 6 represents the final stage of the phase-in of the rules for regulatory initial margin (Reg IM).

Earlier phases are discussed in our previous notes covering obligations on the buy-side and the general implementation of EMIR margin rules. Reg IM requires counterparties to OTC derivatives to post margin on a segregated basis to cover current and potential future exposure during the period between the last margin collection and the time it takes close out derivative positions following the default of the counterparty.

While previous stages have predominantly affected sell-side entities and a small number of buy-side firms, Phase 6 applies to entities with uncleared OTC derivatives portfolios of €8bn or greater. This is expected to catch a larger number of the buy-side. Entities caught by Phase 6 must post Reg IM from 1 September 2022.

Further information can be found in our Phase 6 regulatory initial margin: key considerations document.