A derivative that is not cleared through a central counterparty (CCP). Non-centrally cleared derivatives include interest rate, credit, commodity, FX and equity derivative products. However non-cleared derivatives have different meanings across different regulators and therefore certain products might be exempted from regulatory margin requirements in specific jurisdictions.

Initial margin (IM) is posted as collateral that is meant to protect the parties to non-centrally cleared derivatives from the potential future risk exposure that may occur as a result of future changes in the mark-to-market (MTM) value of the derivatives during the time span needed to close out and replace the position in the event of a counterparty default. The amount of initial margin corresponds to the size of the potential future exposure.