Template:Reg im capsule

Margin Amount (IM) is the snappy, memorable label for that portion of one’s initial margin burden that is imposed directly by one’s local regulators. This is the compulsory party that you have to pony up, even if neither you nor your counterparty want to. It would be nice had the drafting said this a little less obliquely, but I wish feijoas grew in England, and that won’t happen either, so there’s no point getting upset about it.

This must be posted on the Chargor’s behalf to a third party Custodian (IM) and held, out of harm’s way and subject to a security interest in favour of the Secured Party and an account control agreement determining who gets to say what happens to it and and when. Sicne it is held out of harm’s way, neither the Chargor nor the Secured Party can use the Posted Credit Support (IM), and it sits immobilised, a permanent dead weight on the capital efficiency of the world’s financial markets. But everyone is safer that way — unless you are a hardcore modernist, a little redundancy is no bad thing — so we shouldn’t feel too bad about it. To be contrasted and not, however easy it may be, confused with Margin Amount (IA).