NAPF rejects proposal for OTC derivatives

16 April 2012

The Response from the National Association of Pension Funds focuses on the Joint Supervisory Authorities' proposal that parties to bilateral derivative contracts should put up initial margin.

The proposal goes well beyond what was agreed by the Council of Ministers and the European Parliament when they agreed the Derivatives Regulation, and undermines the purpose of the temporary exemption from the clearing obligation that they provided for pension schemes. The NAPF argues in its response that adequate and properly controlled variation margin is more than sufficient to provide protection against the risks to individual institutions and to systemic stability about which the supervisory authorities are concerned.

Full response

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