Variation margin

Variation margin

An additional required deposit to bring an investor's equity account up to the margin level when the balance falls below the maintenance margin requirement.

Variation Margin

Extra money that a member of a clearing house must pay to the clearing house to meet its minimum maintenance requirements. Members pay the variation margin each day or more often to protect the clearing house from the risks inherent to its members buying on margin.
References in periodicals archive ?
The position exempts novated or transferred legacy SPV swaps from variation margin posting and thereby re-enabling the replacement of swap counterparties in legacy structured finance transactions for as long as the securitization transaction remains outstanding.
and Japan on September 1, 2016 and the variation margin requirements implemented on March 1, 2017.
He also briefed the audience on the key features of the Credit Support Deed for cash collateral developed to address the recent variation margin regulatory requirements.
For each trade processed by LCH SwapAgent, the Murex platform calculates the variation margin and generates sensitivities that contribute to the overall margin requirement for each party, eliminating pricing disputes in anticipation of the regulatory overhaul.
Variation margin captures the marked-to-market change in the value of positions on a daily or, in exceptionally volatile periods, intraday basis.
In a press release, the Prudential Regulators say, "The proposed rule does not require a covered swap entity to collect specific or minimum amounts of initial margin or variation margin from nonfinancial end users, but rather leaves that decision to the covered swap entity, consistent with its overall credit risk management.
Dealers have traditionally posted variation margin to each other, so that's not a game-changer in the new Fed rule.
For example, Marshall and Steigerwald (2013) raise a concern about the time-critical liquidity that might be needed to pay a variation margin.
The DME end of day settlement price is used by the Clearing House to mark the market's open positions and thus establish the variation margin.
By expanding our liquidity access solutions, we can help support our clients' short-term liquidity needs so that they are not required to liquidate assets unnecessarily in order to meet the variation margin demands,' said Horsewill.
Scheduled for full operation in early 2014, this exclusive agreement with Euroclear will enable clients of DCCC and DGCX to use CCP-eligible securities held in Euroclear Bank -- and in all other entities connected to the Collateral Highway -- as collateral to fulfill initial and variation margin requirements at DCCC.
Scheduled for full operation in early 2014, this exclusive agreement with Euroclear will enable clients of DCCC and DGCX to use CCP-eligible securities held in Euroclear Bank - and in all other entities connected to the Collateral Highway - as collateral to fulfil initial and variation margin requirements at DCCC.