In an article  in February this year, we reported on the introduction into Parliament of the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill (the Bill). Subsequently, in an article in July, we summarised the main changes made to the Bill by the Select Committee considering it.

On 20 August, a Supplementary Order Paper was tabled in Parliament proposing a number of technical changes to the Bill. The Bill then proceeded through its remaining stages and received its third reading on 27 August. The Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Act 2019 (the Act) now awaits Royal assent. Part 1 of the Act, which contains the new derivatives margin rules, will come into force on the day after the date of Royal assent.

Once the Act is in force, the legal impediments to the immediate availability of margin identified in our February article will be removed. ​This should allow lawyers to provide ‘clean’ collateral opinions in respect of “qualifying counterparties”, enabling those who trade with them to comply with the foreign margin rules to which they are subject.