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Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

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SECTION 1 Definitions and general requirements

Article 1 Definitions

For the purposes of this Regulation, the following definitions apply:

  1. (1)

    "initial margin" means the collateral collected by a counterparty to cover its current and potential future exposure in the interval between the last collection of margin and the liquidation of positions or hedging of market risk following a default of the other counterparty;

  2. (2)

    "variation margin" means the collateral collected by a counterparty to reflect the results of the daily marking-to-market or marking-to-model of outstanding contracts referred to in Article 11(2) of Regulation (EU) No 648/2012;

  3. (3)

    "netting set" means a set of non-centrally cleared over-the-counter ("OTC") derivative contracts between two counterparties that is subject to a legally enforceable bilateral netting agreement.

  4. (4)

    ‘UK UCITS’ means UK UCITS as defined in section 237(3) of the Financial Services and Markets Act 2000.