US banks fear margin rules could hit emerging Asia liquidity

Unequal margining requirements may be a turn-off for local counterparties

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Worries of a liquidity gap if dealers cannot trade with local counterparties

US banks expect onshore swaps liquidity in emerging Asian markets to be constrained from March 2 next year, as counterparties in non-netting jurisdictions will be reluctant to comply with unequal margining requirements in new derivatives rules.

The next phase of the non-cleared derivatives margin rules comes into force on March 1, requiring US, European, Japanese and Canadian banks to collect variation margin from financial counterparties on all trades entered into after that point. March 2 will

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