Collateral issues see Korea opt for six-month VM transition
Move will bring country into line with Australia, Hong Kong and Singapore
South Korea seems likely to opt for a six-month implementation period from March 1 for its variation margin regime for non-cleared derivatives. The industry has been lobbying for this move as there is concern that changes to the country’s business code to allow the rehypothecation of collateral will not be implemented in time for the originally proposed three-month period.
“If the rehypothecation issue is not cleared up it will become a huge problem. Institutions will have an obligation to
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