The groups said:
While the systemic risk implications of granting forbearance are low, it is clear to the associations that the documentation and operational challenges that are necessary to comply with the VM regulations by March 1 are high, despite concerted and continuing effort by our members and other market participants.
They warned that without a transition period, many market participants might have to significantly curtail their derivatives trading activities – resulting in disruption and market fragmentation. They said:
[R]egulatory forbearance with respect to the VM regulations strikes an appropriate balance between upholding the integrity of the regulations while preserving an open and stable derivatives market.Read the letter.