On 15 January 2025, the Bank of England (BoE) published a statement on its input, together with the Commodity Futures Trading Commission (CFTC), into a report on initial margin transparency and responsiveness in centrally cleared markets.

The BoE explains that it and the CFTC have co-chaired international work on centrally cleared margin practices stemming from the March 2020 market turmoil (also known as the ‘dash for cash’). As a result of that work, the Basel Committee on Banking Supervision (Basel Committee), the Bank for International Settlements’ Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) have now published their final report: ‘Transparency and responsiveness of initial margin in centrally cleared markets – review and policy proposals’, which sets out policy proposals designed to increase the resilience of centrally cleared markets.

In the statement, the BoE confirms that it and the CFTC support the findings set out in the report, including the policy proposals which are intended to improve centrally cleared market participants’ understanding of potential future margin requirements and margin responsiveness through enhanced central counterparty and clearing member transparency and governance practices. 

The report’s key conclusions include the need for greater transparency on initial margin models (including through appropriate disclosures and the provision of enhanced margin simulation tools) and appropriate governance arrangements on the setting of initial margin requirements.