Margin Requirements: Comparison of the United States, European Union and Hong Kong Margin Requirements for Non-Cleared Derivatives

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1 April 22, 2016 Margin Requirements: Comparison of the United States, European Union and Hong Kong Margin Requirements for Non-Cleared Derivatives Contents Key Takeaways: > Recent margin requirements released in the U.S. and European Union, and proposed in Hong Kong, are largely consistent with the BCBS/IOSCO Framework, though some differences do exist between jurisdictions, including the scope of entities and products covered. > Compliance dates for various requirements are consistent across jurisdictions. > Due to the differences in margin requirements between jurisdictions, the documentation and internal operations necessary for compliance will vary jurisdiction to jurisdiction. > To the extent that there are differences, some of which create cross-border transactional issues, the various global regulators may be able to resolve some differences in future substituted compliance determinations. Introduction In September 2013, the Basel Committee on Banking Supervision ( BCBS ) and the Board of the International Organization of Securities Commissions ( IOSCO ) finalized an international framework for margin requirements for non-cleared derivatives (the BCBS/IOSCO Framework ). The goal of this framework was to create an international margin standard for non-cleared derivatives so that financial regulators around the world implementing margin requirements in their respective jurisdictions would, hopefully, be largely consistent with their peers in other jurisdictions. Now in 2016, we have seen final margin regulations in the U.S. from its various bank regulators (the Prudential Regulators ) and the Introduction... 1 Who are Covered CPs?... 2 Initial Margin and Documentation Requirements... 3 Variation Margin and Documentation Requirements... 5 Legacy Trades... 5 Netting Sets... 6 Amendments to Legacy Trades... 6 Differences in Scope of Covered Products... 6 Variation Margin Issues and Deliverable FX Trades... 7 Filling In the Margins and Substituted Compliance... 8 Substituted Compliance 9 Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 1

2 Commodity Futures Trading Commission (the CFTC, together with the Prudential Regulators, the U.S. Regulators ), a proposal from the Hong Kong Monetary Authority (the HKMA ) and the final draft Regulatory Technical Standards from the European Supervisory Authorities (the ESAs ) under Regulation (EU) No. 648/2012 ( EMIR ). Ideally there would be a general one-size-fits-all compliance policy for all jurisdictions, so that regulated entities will be able to adopt certain policies, documentation requirements or internal processes that work across jurisdictions, and will be better positioned to manage regulatory and compliance costs and contractual and legal remedies in their cross-border relationships. However, while such final/proposed requirements from the various regulators are largely consistent with the BCBS/IOSCO Framework, market participants will likely notice key differences between jurisdictions that will impact their trading relationships. Linklaters released multiple Client Notes providing summaries of the individual margin requirements released by the U.S. Regulators, 1 the HKMA, 2 and the ESAs, 3 which highlight that the global margin requirements do have a great number of similarities in both scope and substance. Also noteworthy is that all three jurisdictions intend to have consistent compliance dates, most notably that variation margin requirements will become generally applicable in March By this date, certain regulated derivatives entities, including swap dealers 4 in the U.S., authorized institutions 5 in Hong Kong and the FC/NFC+s under EMIR 6 (each, a Covered Entity and collectively, Covered Entities ), will need to ensure appropriate documentation is in place with those counterparties from whom they must collect and post initial/variation margin (each, a Covered CP and collectively, Covered CPs ). Who are Covered CPs? Covered CPs are similarly defined by the U.S. Regulators, the HKMA and the ESAs to generally include any sort of financial entity (domestic and foreign) 7 and 1 Linklaters Client Note available at argin_requirements.pdf. Linklaters Client Note available at ndards_for_non-centrally_cleared_otc_derivaties.pdf. Linklaters Client Note available at Also included are Major Swap Participants, and U.S. banks that register as a Security-Based Swap Dealer or Major Security-Based Swap Participant. A list of current swap dealers is available on the CFTC s website: Authorized institutions are banks, restricted licensed banks and deposit taking institutions which are subject to the Code of Banking Practice. FCs are financial counterparties and NFC+s are non-financial counterparties above the clearing threshold as defined under EMIR. In addition to locally regulated entities, the U.S. Regulators rules and HKMA s proposal capture non-local entities carrying on business outside their respective jurisdiction which would require licensing had such business been carried on in the U.S. or Hong Kong, respectively. Such Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 2

3 exclude certain public sector entities, multilateral developments banks and the Bank of International Settlements. However, there are notable distinctions among the jurisdictions. For example, the U.S. Regulators also excluded certain captive finance companies and treasury affiliates from the applicable regulatory term identifying Covered CPs. The ESAs rules have an exemption for certain covered bond issuers, but would capture certain non-financial entities qualifying as an NFC+ under EMIR. Similar to EMIR, the HKMA s proposal also includes significant non-financial entities. 8 The impact of these differences may not represent a significant portion of the overall market, but it could lead to Covered Entities losing business if a client is concerned that its trades may be subject to margin requirements when trading with Covered Entity A, but not with Covered Entity B. For example, an eligible treasury affiliate in the U.S. that would be a NFC+ if established in the European Union (the EU ) may no longer wish to trade with a U.S. branch of a European bank, if that branch is subject to the margin requirements under EMIR. The same treasury affiliate could find similar issues in Hong Kong under the HKMA s proposal. Of particular note is that the EU rules allow an EU Covered Entity not to post margin to (and, in some cases, but subject to an overall cap of 2.5% of its OTC derivatives business, not to collect margin from) a counterparty in a jurisdiction where legal enforceability of netting agreements or collateral protection may not be ensured. Initial Margin and Documentation Requirements Documentation required for initial margin will generally include new tri-party agreements with a custodian to hold segregated initial margin. Although such agreements may not be expressly required, the impact of other regulations related to segregation requiring eligible custodians to hold initial margin will likely result in tri-party structures as a common compliant arrangement. It is also likely that Covered Entities will need appropriate legal opinions in respect of their tri-party arrangements and their enforceability in the event of a bankruptcy of the Covered Entity, its Covered CP or the custodian. Covered Entities and their counterparties will also need to reconsider how to document margin delivery and return requirements. Existing Credit Support Annexes ( CSAs ) published by the International Swaps and Derivatives Association ( ISDA ) will likely be non-compliant. For example, under the U.S. 8 definition expands the extra-territorial effect of each regulator s respective margin rules. The margin requirements under EMIR have a similar prong such that entities not established in the EU that would be a FC or NFC+ if established in the EU may also be captured by EMIR s margin requirements if certain other conditions are also met. Significant non-financial entities are those which have an aggregate average notional amount of non-centrally cleared OTC derivatives exceeding HKD60 billion. Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 3

4 Regulators rules, initial margin cannot be utilized in the calculation to determine whether or not variation margin must be delivered. This prohibition is contrary to a common market practice which generally will include amounts of initial margin held and/or pledged in determining Delivery Amount and Return Amount under both English law and New York law CSAs. For trading relationships subject to the initial margin requirements under EMIR, the market standard title transfer English law CSA will not be compliant with the requirement to segregate initial margin. The title transfer English law CSA will also be non-compliant under the HKMA s rules, if finalized as currently proposed. As global margin requirements are finalized, and substituted compliance is made available, it is likely that documentation will move towards a more standardized format which works in multiple jurisdictions. ISDA is supporting multiple working groups which are drafting updated CSAs to address various documentation requirements. 9 While standardization may eventually be a common theme across all initial margin documentation, the amount of margin required may vary not only from jurisdiction to jurisdiction, but even between Covered Entities in the same jurisdiction. While the rules published by the U.S. Regulators, the ESAs and HKMA do provide a standard model for determining the amount of initial margin required, all three also permit Covered Entities to utilize approved models as an alternative. This ability for each Covered Entity to have its own model for initial margin delivery amounts may result in variations in minimal required initial margin amounts being the result of not only applicable law, but also of the flexibility permitted by local regulators, a Covered Entity s model and creditworthiness of the Covered CP. Many of these issues will take years to be fleshed out, let alone resolved, but at least some Covered Entities have the luxury of time on their side. The initial margin requirements are being phased in over time, and most buy-side market participants will likely not be impacted until 2020, if at all. Over the course of the next few years, the marketplace may develop documentation, policies, custodial services and collateral management process that are not only compliant, but achieve such compliance in efficient and cost-effective ways that will work across multiple jurisdictions. 10 Unfortunately, not all of the forthcoming margin requirements have the lengthy phase-in period afforded for initial margin implementation. 9 For example, the 2016 CSA for Variation Margin (VM), which is an updated version of the 1994 ISDA CSA (Security Interest - New York Law) but is limited to variation margin. This 2016 CSA is intended to allow parties to establish variation margin arrangements that meet the requirements of new regulations on margin for uncleared swaps. 10 See DerivSource, Collateral Management: Where Do All The Pieces Fit? (2016), available at (article providing an overview of some of the solutions available in the market to support collateral management and related functions for both cleared and non-cleared derivatives). Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 4

5 Variation Margin and Documentation Requirements As noted above, the U.S., Hong Kong and Europe have provided March 2017 compliance dates with respect to their variation margin requirements for most market participants. 11 The immediate urgency for Covered Entities will be to have CSAs with all Covered CPs that are compliant with the applicable margin rules. For trading relationships already subject to a CSA, this means either amending the existing CSA to be compliant with applicable regulations or executing an entirely new CSA. To assist in this process, industry working groups under the auspices of ISDA are preparing a market solution so that parties may have standard form documentation, in the form of a new CSA that is compliant with the variation margin requirements in the U.S., Europe and other jurisdictions (including a number in Asia). 12 Such standard form documentation may only provide part of the solution, leaving parties to make necessary modifications depending on the applicable law. For example, parties will need to determine what are and are not eligible types of collateral and minimum valuation haircuts based on the applicable local law(s). 13 However, even if a market solution is offered, as seen in the past with the various other regulatory documentation requests such as the Dodd-Frank Protocols and EMIR Protocols, engaging Covered CPs and explaining the necessity of the new documentation can often take a great deal of time. If past experience is any indicator of the future, then Covered Entities know that a year is not much time to get the documentation and processes in place to ensure all trade relationships will be compliant come March Legacy Trades One significant issue Covered Entities need to consider is how they will treat those derivatives executed before March 2017 ( Legacy Trades ). Legacy Trades will not be subject to the margin requirements in the U.S. or Europe, and similar treatment is provided for in the proposed rules for Hong Kong. However, this also means that Legacy Trades may not be netted with non-legacy Trades when determining delivery/return of variation margin amounts, unless the Legacy Trades are thereafter always treated as non-legacy Trades subject to the applicable regulations. 11 There are earlier compliance dates for the largest market participants dealing among themselves. 12 Supra note The differences in valuation haircuts could be significant. The U.S. Regulators provide for an additional 8% haircut on variation margin collateral in the form of securities, unless such securities are posted in respect of a transaction (or group of transactions) where both the securities and such transaction s (or group of transactions ) currency of settlement are the same currency. See CFTC Regulation (b)(2)(A) and Prudential Regulators Regulation.6(c)(1)(i). This concept of matching specifically pledged/transferred collateral to a specific transaction (or group of transactions) is not only inconsistent with common market practice, it is also not required under the ESAs requirements or the HKMA proposal. Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 5

6 Netting Sets If a Covered CP is expecting not to deliver variation margin for its Legacy Trades, then the Covered Entity-counterparty will not only need to consider the documentation issues, but also operational issues associated with this. For example, do a Covered Entity s collateral and trade management teams have the processes in place to apply different netting rules to transactions within a Covered CP s book of trades? If an existing CSA is to be amended before March 2017, will all future trade confirmations identify the appropriate netting set? As an alternative to amending an existing CSA, will parties look to replicate existing CSAs and have the new CSA only cover a particular netting set? Covered Entities will need to confirm what they can and cannot offer Covered CPs before reaching out to such clients to offer regulatory-compliant solutions. This process, if not done quickly, adds further pressure on Covered Entities to quickly negotiate and execute margin documentation. Amendments to Legacy Trades Another issue will relate to tracking any amendments, modifications, novations and/or compression exercises impacting a Legacy Trade. Under the regulations from the U.S. Regulators, such events would result in the Legacy Trade no longer being excluded from the variation margin requirements. 14 In Hong Kong, the HKMA will allow genuine amendments to Legacy Trades. 15 The position on amendments is less clear under the ESAs requirements. With that said, questionable amendments that appear to be efforts to avoid margin requirements and/or resulting in a significantly larger credit risk to the Covered Entity (e.g., substantial increases to the notional amount on a Legacy Trade) would likely result in adverse regulatory scrutiny from local European regulators. It should be noted that these differences between jurisdictions, while frustrating from an internal compliance perspective, may only arise in a small number of Legacy Trades, and will eventually not matter at all as Legacy Trades, in general, roll off and are replaced by new trades which are covered by the margin requirements. Differences in Scope of Covered Products A more significant difference between the three sets of regulations is the treatment of derivatives which may be subject to variation margin requirements in one jurisdiction, but not another. For example, the ESAs have provided that, with respect to variation margin requirements, single stock equity options and index options will be subject to a three-year phase-in. Such treatment is not something provided for in the HKMA proposal or the margin requirements from the U.S. Regulators. A potentially even more significant difference, particularly for common cross-border multi-currency trades, relates to certain foreign exchange 14 The CFTC, however, has provided that it would reconsider this policy with respect to certain compression exercises, but requires further discussions with market participants before altering the treatment of compression exercises reflected in the current margin regulations. 15 The HKMA has said that an amendment that is intended to modify an existing derivative s contract for the purpose of avoiding margin rules will be considered a new derivative contract. Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 6

7 transactions which are exempt from the U.S. Regulators margin requirements entirely, but subject to variation margin requirements under the proposal from the HKMA and final rules from the ESAs. Variation Margin Issues and Deliverable FX Trades In 2012, the U.S. Treasury issued a final determination 16 exempting physically deliverable foreign exchange forwards 17 and foreign exchange swaps 18 (collectively, Deliverable FX Trades ) from the definition of swap. The impact of this final determination is that Deliverable FX Trades are not subject to any of the U.S. Regulators margin requirements. Similar treatment is not provided for under EMIR or the proposal from the HKMA. The result of this divergent treatment will be that if a trade relationship between two counterparties is subject to both the ESAs and the U.S. Regulators requirements, separate netting sets and related variation margin deliveries would be needed for Deliverable FX Trades and all other trades subject to the margin requirements. In other words, a single trading relationship may have inconsistent margin delivery requirements. Although the U.S. Regulators did not expressly provide in their final rules that Deliverable FX Trades in particular could not be part of a netting set which includes the in-scope trades, they did provide more generally that they [did] not believe that it would be appropriate for margin requirements for non-cleared swaps to be offset by netting other products or exposures across markets against other products that may present different concerns about safety and soundness or financial stability, or that are not subject to similar associated margin requirements. 19 Without further guidance or clarification from the U.S. Regulators, Deliverable FX Trades will need to be netted separately, even from other FX transactions (e.g., cross-currency swaps and non-deliverable forwards) which are subject to the margin requirements. An example of this is as follows: Covered Entity A is subject to U.S. margin requirements and Covered Entity B is not subject to U.S. margin requirements. If Covered Entity A is US$10m in-themoney with respect to the entirety of their book of trades subject to U.S. margin requirements, then Covered Entity A should expect a one-way delivery of variation margin to Covered Entity A s account. However, if Covered Entity A is also US$3mout-of-the-money with respect to its Deliverable FX Trades, a delivery of only US$7m to Covered Entity A s account would be non-compliant with the variation margin requirements under the U.S. regulations. What will likely 16 For more information on the final determination, see the Linklaters Client Note U.S. Treasury Issues Final Determination Respecting FX Swaps and FX Forwards Under the Commodity Exchange Act, as amended by the Dodd-Frank Act, available at 17 A foreign exchange forward is a transaction that solely involves the exchange of two different currencies on a specific future date at a fixed rate agreed upon on the inception of the contract covering the exchange. 18 A foreign exchange swap is a transaction that solely involves: (i) an exchange of two different currencies on a specific date at a fixed rate that is agreed upon on the inception of the contract covering the exchange and (ii) a reverse exchange of those two currencies at a later date and at a fixed rate that is agreed upon on the inception of the contract covering the exchange FR 74840, (Nov. 30, 2015); 81 FR 636, 651 (Jan. 6, 2016). Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 7

8 happen then is Covered Entity B will demand the delivery of US$3mto Covered Entity B s account, concurrently with the delivery of USD10 million to Covered Entity A s account. Economically, the parties are in the same position were there a one-way delivery of US$7m, but it actually introduces increased costs and risks to the trading relationship. CSAs or other margin documentation would need to account for this by having separate CSAs, one exclusively covering Deliverable FX Trades and the other covering all other trades between the parties. Alternatively, the U.S. Regulators margin requirements could set a floor amount on margin requirements, resulting in a party being over-collateralized when it is out-of-themoney with respect to its Deliverable FX Trade positions. This divergent treatment also means that parties will need to have increased access to liquidity to deliver more margin since positions cannot be netted. These increased operational costs and settlement risks provide no meaningful benefit to the safety and soundness or financial stability of the derivatives market. Although one could understand why the U.S. Regulators would not want to net between entirely different derivative products (e.g., swaps and futures), it does not seem rational that Deliverable FX Trades cannot be netted against cross-currency swaps and non-deliverable forwards. Filling In the Margins and Substituted Compliance Resolution with respect to the differences between jurisdictions can hopefully be achieved by the various regulators through their own process of finalizing their respective substituted compliance determinations. Although such determinations generally only benefit those parties engaging in cross-border transactions (since most issues associated with jurisdictional differences only impact those parties subject to cross-border transactions), it may also be the case that regulators will use such actions as a venue to provide further guidance/interpretations in an effort to bring their own regulations more in line with international norms. However, even without such efforts to address differences existing in the margins, given the broader similarities and general consistency with the BCBS/IOSCO Framework, it currently seems unlikely any single jurisdiction s margin requirements will result in a global migration of parties transitioning their trades to or away from any particular jurisdiction. With that said, current settlement requirements from the U.S. Regulators may result in small non-u.s. Covered CPs avoiding transactions with Covered Entities subject to the U.S. margin requirements and unable to elect substituted compliance (e.g., local U.S. branches of U.S. banks). The U.S. Regulators are requiring all margin to be delivered T+1 at the latest. Margin requirements in Europe permit T+2 for variation margin in certain situations and Hong Kong s final rules may ultimately provide T+3. When the T+1 requirement was initially proposed by the U.S. Regulators, market participants described the requirement as unworkable. Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 8

9 Unfortunately, the U.S. Regulators did not waver from their initial proposal and ultimately finalized the T+1 requirement. What does this mean for market participants who may have a margin delivery requirement of T+1 when facing a counterparty whose own requirement is T+2/T+3? Unless an entity intends to provide margin generally in the form of cash (which is unlikely) and/or generally post excess margin so that over-collateralization may meet future collateral requirements, a T+1 requirement can be an operational barrier resulting in many non-u.s. Covered CPs limiting their trading to Covered Entities which will only require T+2 settlement. This however is only an issue in the cross-border context where a Covered Entity cannot elect substituted compliance. Therefore, it becomes a critical inquiry to determine who can elect substituted compliance. Substituted Compliance The various regulations in the U.S. and Europe, and Hong Kong s proposal generally permit substituted compliance to be elected by a Covered Entity when such entity (from the viewpoint of the local regulator) is either a foreign bank, local branch of the foreign bank, or other entity which was incorporated under the laws of a foreign jurisdiction (collectively, a Foreign Entity ). 20 In such instances, the Foreign Entity is permitted to comply with the requirements of its home jurisdiction. However, the U.S. Regulators and the ESAs also provide that if such Foreign Entity is guaranteed by a local entity, then substituted compliance will likely be unavailable. 21 Under EMIR, for example, if a transaction is between two entities, both located in a non-eu third-country that has not been declared equivalent by the European Commission, and one of the counterparties benefits from a substantial guarantee issued by a FC established in the EU (i.e., covers at least EUR8bn gross notional and at least 5% of total OTC derivative exposure of FC), then the margin requirements under EMIR will apply. Although it is fairly certain that substituted compliance will eventually be available, it is the extent to which a local regulator adds qualifications/conditions to a substituted compliance determination, or ultimately only provides a partial substituted compliance determination, that allows a Foreign Entity to finalize compliance mechanics by implementing documentation and internal policies and procedures to address requirements of multiple regulators. Hopefully, the global regulators appreciate the sense of urgency on their side to review the issues Foreign Entities face in cross-border transactions. Ideal documentation, arrangements, process and procedures for Foreign Entities would be something that works across jurisdictions. A substituted compliance determination can greatly assist in this process. Without it, Foreign Entities will need processes to 20 We note that other entities are also permitted to utilize substituted compliance, depending on the applicable law. For more on the jurisdiction-specific information, see the Linklaters Client Notes at Footnotes 1 (U.S. margin requirements), 2 (Hong Kong margin proposal) and 3 (the RTS from the ESAs). 21 Similar treatment is not provided for guaranteed entities under the HKMA s proposal. Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 9

10 constantly adjust for regulatory differences, 22 differences which may do little to increase the safety and soundness of the global derivatives market, but do increase regulatory risk on the Covered Entities by adding another level of complexity to their compliance procedures. Unfortunately, given that Covered Entities have less than a year to prepare for variation margin requirements, it is likely that some internal compliance matters will need to initially be implemented without the benefit of substituted compliance. 23 This may result in policies that are stricter than what is required in one jurisdiction, but meet the minimum requirements of another. Finding a solution where one policy works across borders will not only help minimize operational complexities of jurisdiction-by-jurisdiction modifications, but also mitigates the regulatory risk for cross-border deals. In the future, as substituted compliance determinations are issued, changes to compliance policies can then begin to focus more on commercial preferences and market norms. 22 For example, Covered Entities will want to identify permissible arrangements to hold initial margin. For non-cash initial margin, the ESAs requirements focus on segregation, while requiring, broadly, that cash collateral be deposited in an account with either a central bank or credit institution that is unaffiliated with either trade counterparty. It appears, however, that the only permissible credit institution would be an EU credit institution, based on the current draft of the ESA s requirements. The U.S. Regulators require any initial margin, both cash and securities, be held with a custodian that is unaffiliated with either trade counterparty, but they do not require that such custodian be a U.S. credit institution. It should be noted that there is the possibility for this requirement from the ESAs rule to be modified/amended so that a broader set of credit institutions may be utilized. It is unlikely that differences between an EU credit institution and a U.S. credit institution have meaningfully impacted the safety and soundness of the global derivatives market. 23 Under the ESAs requirements, transitional relief from collecting and posting initial margin and variation margin with respect to intra-group transactions applies in the period until an equivalence determination has been made with respect to the relevant third country where the counterparty is based. Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 10

11 Contacts If you have any questions, please get in touch with the contacts on the right side or your usual Linklaters contact. Caird Forbes-Cockell Partner, New York Robin Maxwell Partner, New York Pauline Ashall Partner, London Jonathan Ching Counsel, New York I-Ping Soong Counsel, Hong Kong Jacques Schillaci Associate, New York Edward Ivey Associate, New York Authors: Edward Ivey, Pauline Ashall and I-Ping Soong This publication is intended merely to highlight issues and not to be comprehensive, nor to provide legal advice. Should you have any questions on issues reported here or on other areas of law, please contact one of your regular contacts, or contact the editors. Linklaters LLP. All Rights reserved 2016 Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC It is a law firm authorised and regulated by the Solicitors Regulation Authority. The term partner in relation to Linklaters LLP is used to refer to a member of Linklaters LLP or an employee or consultant of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP and of the nonmembers who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ, England or on Please refer to for important information on Linklaters LLP s regulatory position. We currently hold your contact details, which we use to send you newsletters such as this and for other marketing and business communications. We use your contact details for our own internal purposes only. This information is available to our offices worldwide and to those of our associated firms. If any of your details are incorrect or have recently changed, or if you no longer wish to receive this newsletter or other marketing communications, please let us know by ing us at marketing.database@linklaters.com Avenue of the Americas New York, NY Telephone Facsimile Linklaters.com Comparison of the U.S., EU and Hong Kong Margin Requirements for Non-Cleared Derivatives 11 A