Template:M summ 2018 CSD 3(c)(iii): Difference between revisions

The other difference is that ''usually'' you paid your IA directly, and by [[title transfer]], to your counterparty. Since generally dealers would require IM, but customers would not, this had the curious effect of increasing the customer’s credit exposure to the dealer, at the same time it reduced the dealer’s market exposure against the customer. But — and for that very reason, Reg IM you must pay not to your dealer, but to a third-party [[custodian]], subject to a security arrangement and an [[account control agreement]], to avoid exacerbating counterparty credit risk the other way. The regulatory regime is therefore economically not the same as the previous non-regulatory IA regime, as the recipient cannot monetise the regulatory initial margin it receives, or use it elsewhere in its business. This [[reuse]] right is important for those involved in [[margin lending]].