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Letter to IOSCO and BCBS setting out how current margin settlement requirements will negatively disadvantage Japan and Asian markets because of time zone differences
The Japan Financial Markets Council (JFMC) and the International Swaps and Derivatives Association (ISDA) sent a letter to IOSCO and BCBS pointing out how the current margin settlement requirements for uncleared swaps will disadvantage Japan and Asian markets because they are in a different time zone. The T+1 requirement will place an additional burden on market participants in the Asia-Pacific region including their access to types of collateral which may result in higher overall funding costs. The JFMC and ISDA therefore are asking for a rethink and that a longer settlement cycle should be permissible so as not to disadvantage market participants based in Asian.