Many of proposed enhancements will reinforce sound practices at the CCP level and deliver meaningful benefits to UK Finance members, both as direct and indirect clearing members, by promoting robust market infrastructure and safeguarding systemic stability. We advocate for a proportionate approach to implementation to prevent unintended consequences, such as clearing costs escalation, market fragmentation in products subject to the mandatory clearing, and the potential diminished competitiveness of UK CCPs. 

We support the enhancements to initial and variation margin requirements, including measures to mitigate procyclicality and improve resiliency. We welcome expanding the suite of eligible collateral to include uncollateralised bank guarantees (UBGs) under proportionate safeguards, such as issuer restrictions and irrevocability to mitigate risks. Finally, we encourage the recognition of the upcoming DIGIT (and any subsequent series) as valid forms of collateral. To ensure a sound industry transition towards greater use of digital securities, we call on the HM Treasury to appoint its Digital Markets Champion and establish the cross-industry taskforce.