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Initial Margin for UK Pension Schemes – how to be SMARTEST

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Paul Cluley

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Andy Cork

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Bowden Neil
Neil Bowden

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Higgins Jane
Jane Higgins

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10 December 2019

Initial margin (IM) requirements for uncleared over the counter derivatives contracts are being phased in, not just for financial institutions but also for financial end-users such as pension schemes. 

IM is not the same as Variation Margin (VM) – it will affect fewer pension schemes than VM, but affected schemes will need to take significant steps to comply. For example, there are likely to be a number of differences to the way in which affected schemes collateralise OTC derivative contracts (if they currently do so at all).

The threshold at which the IM requirements apply will be lowered from September 2020, meaning that some schemes may be in scope from that date. It is important to identify now if your scheme will be affected, as there will be considerable preparatory work to do. 

Our new short guide is designed to help you identify whether your scheme may be in scope and, if so, the best way to start preparations. 

 

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