Regulators review derivatives margin rules after Archegos meltdown


The meltdown at Archegos Capital Management that triggered big losses at several banks highlighted the need to review rules on posting margin or cash against derivatives trades, the head of a global markets regulator said on Monday.

Archegos was highly exposed to ViacomCBS Inc (VIAC.O), whose shares plunged in March, leaving the hedge fund facing a massive margin call from its prime broker banks. read more Archegos was unable to meet the call to secure equity swap trades the banks had partly financed.

“It’s early days, but in my view incidents like these are valuable opportunities to test the effectiveness of these post-crisis reforms,” Ashley Alder, chairman of the International Organization of Securities Commissions (IOSCO), told a conference held by derivatives industry body the International Swaps and Derivatives Association (ISDA).

“I am asking the IOSCO secretariat initially to do some work in this area,” Alder said.

IOSCO, which groups market…

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