Shearman & Sterling LLP | FinReg | International Bodies Launch Survey on Margin Calls
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  • International Bodies Launch Survey on Margin Calls

    The Basel Committee on Banking Supervision, the Committee on Payments and Market Infrastructure and the International Organization of Securities Commissions has published a survey on margin calls as part of an investigation into liquidity shortfalls during the early stages of the COVID-19 pandemic. The combined effect of government measures to contain the pandemic in March 2020, together with market uncertainty, job losses and travel restrictions triggered a pullback in economic activity and stress on market liquidity. The non-bank financial intermediation sector was found to be particularly vulnerable to the liquidity shock.
    The Basel Committee, IOSCO and CPMI have established a Joint Working Group on Margin, co-chaired by the Bank of England and the US Commodity Futures Trading Commission. The JWGM is mandated to investigate initial and variation margins as part of its work to improve the resilience of the non-bank financial intermediation sector. The JWGM will focus on:
    • Margin in cleared and uncleared markets during March 2020;
    • Margin practice transparency, predictability and volatility during March 2020; and
    • The extent to which market participants were prepared to meet margin calls and the actions they took to do so.

    The survey will assist the JGWM in conducting these investigations. The survey is aimed at clients of banks, market infrastructures and securities markets, as well as non-bank intermediaries. Responses should be submitted by May 17, 2021.
    View the press release on the BCBS, CMPI and IOSCO survey on clients and non-bank intermediaries' margin calls.

    View the announcement on the JWGM's Survey.
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