Rehypothecation provision is impractical, critics say

09/13/2013 | Risk.net (subscription required)

The Working Group on Margining Requirements, which is jointly run by the International Organization of Securities Commissions and the Basel Committee on Banking Supervision, recently published final margin requirements for noncleared derivatives, including a provision on rehypothecation. Executives said at an ISDA conference that the measure, which allows dealers to rehypothecate assets collected from clients as initial margin for certain trades, is not practical and doesn't offer clients any benefit.

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