On August 1, 2016, ISDA® published the 2016 Phase One Credit Support Annex for Initial Margin (Security Interest - New York Law) (2016 IM CSA), a new credit support annex for initial margin (IM), designed to help entities subject to new global IM requirements for uncleared swaps comply with the rules.

The 2016 IM CSA is an updated version of the ISDA 1994 Credit Support Annex (1994 CSA), with a similar structure and many similar provisions (see Practice Note, The ISDA Master Agreement: Negotiating the ISDA Credit Support Annex (CSA)). However, while the 1994 CSA covers both IM and variation margin (VM), the 2016 IM CSA governs only IM.

The 2016 IM CSA may be used by parties to uncleared swaps that are subject to new IM requirements as of September 1, 2016 (phase one) to establish IM arrangements that comply with the rules (see Practice Note, The New ISDA® Credit Support Annexes and Global Margin Compliance for Uncleared Swaps: Applicable Rules and Phase-in Dates).

As of September 1, 2016, phase-in begins for US swaps entered into by a covered swap entity (CSE), that is, an entity subject to the rules, where both:

together have an average daily aggregate notional amount of covered swaps outstanding for March, April, and May of 2016 that exceeds $3 trillion (see Legal Updates, Final Uncleared Swaps Margin Rules for Banks Adopted by US Bank Regulators and CFTC Adopts Final Rules on Uncleared Swaps Margin).

Note that the EU has delayed its phase-one IM implementation indefinitely (see Legal Update, EU Delays Margin Rules for Uncleared Swaps).

For further detail on the 2016 IM CSA, see Practice Note, The New ISDA® Credit Support Annexes and Global Margin Compliance for Uncleared Swaps: ISDA 2016 Initial Margin CSA.

Note that in April 2016, ISDA published the 2016 Credit Support Annex for Variation Margin (2016 VM CSA) which was the first new version of the ISDA CSA since ISDA published the 1994 CSA over 20 years ago (see Legal Update, ISDA Publishes 2016 Credit Support Annex for Variation Margin (New York Law)). The 2016 VM CSA is also designed to assist parties with the new margin rules.

For a complete list of ISDA credit support documentation, see Practice Note: The New ISDA® Credit Support Annexes and Global Margin Compliance for Uncleared Swaps: Agreements and Documentation: 2016 CSAs and Margin Protocols.