Regulation

A new trading rule affecting 800 companies just kicked in. Hundreds may not be ready

It's called uncleared margin rule, or UMR. And some are more prepared than others

In the US, firms can rely more on their dealers to help calculate initial margin while in Europe, regulators demand firms complete their own independent calculation
In the US, firms can rely more on their dealers to help calculate initial margin while in Europe, regulators demand firms complete their own independent calculation Photo: Daniel Acker/Getty Images

After a pandemic delay, phase six of the uncleared margin rule goes into effect today. Some firms are ready. And some aren't.

The latest iteration of the rules, called UMR, is the final implementation created to prevent another repeat of the 2008 financial crisis. That's when inadequate collateral, along with huge exposures in over-the-counter derivatives, led to government bailouts when those bets went south.

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