Regulators are in the process of developing advice to government in relation to the implementation of margin requirements for non-centrally cleared over-the-counter derivatives. The Payments System Board said in its annual report, which was released yesterday, that these requirements will be phased in between 2015 and 2019.The purpose of margin requirements is to reduce contagion from the default of a derivatives counter-party by ensuring that collateral is available to offset any losses that arise.So-called "margining" is part of the regulatory overhaul of derivatives markets that started this year.The PSB confirmed that regulators expect banks to have arrangements in place by the end of the year for central clearing of US dollar, euro, British pound and yen-denominated interest rate derivatives.It said regulators would monitor Australian dealers' progress in implementing clearing arrangements before recommending mandatory central clearing of Australia dollar-denominated interest rate derivatives.At this stage, there is no recommendation regarding mandatory platform trading in OTC derivatives. However, regulators see in-principle benefits in a greater use of trading platforms in the Australian OTC derivatives market.