Colateral Chat (Blogs)
UMR – What lessons have been learned from previous extensions
Shaun Murray
July 30, 2019

As the dust settles on the BCBS-IOSCO statement allowing the regulatory bodies to grant additional time to smaller entities impacted by Phase 5, I thought it a good time to share some lessons learned from the 4 years I spent leading a Phase 1 dealer through the Uncleared Margin Rules maze to achieve full compliance.

2016 will always be a year in banking that I will not forget; 2009 for collective reasons would still be the standout year, but for personal reasons, 2016 runs it very close.

The build-up to transform a Phase 1 dealer into a UMR compliant entity, delivering multiple new technologies, devising and developing new processes and procedures, building governance and control frameworks and ensuring those responsible working in the front to back BAU environment,  understood what was happening and were operationally ready when the switch was flicked, were all the things you would expect from a large scale transformative programme.

You could play word bingo to describe this period in my career – stressful, fun, chaotic, amazing, challenging, rewarding, sleepless, gargantuan, intense and complex. Frankly, it still doesn’t adequately describe the efforts from the best part of 120 people at its peak over an 18-month period.  So, why am I telling you this?

You are aware that UMR rules are multifaceted, but do you know that regulatory Initial Margin is far more complicated than Variation Margin? It introduces a magnitude of complexity and “new” for every firm entering into Phase 5 or 6.

We got there in 2016, but it wasn’t without fire drills and hysteria and a lot of people went through all parts of the Margin Reform “Wheel of Pain”. That said, we got there, we succeeded, and it wasn’t a fluke, it was 18 months of very hard work.

Assuming that your local regulator does agree with the BCBS-IOSCO extension (to date, only MAS has done so) and you are able to slide a year further out in your IM delivery plans, I urge you not to sit on your hands. Time is briefly on your side, but te ‘foot off the gas’ moment runs the risk of going on for too long, the focus will shift elsewhere, and you will wonder where the time went.

You need to prepare for a transformative journey. Externally, you need to interact across the industry with your dealers, technology vendors, and custodians. Internally, you need to piece all aspects together and prove that you are compliant with Initial Margin regulations with viable use tests before you flick your switch.

Margin Reform is here to help you on your compliance journey.

For more information please contact us at

For further articles on all things margin, collateral and legal please register with us at