(12)Pursuant to Prudential Standard CPS 226, variation margin must be exchanged, subject to the de minimis threshold referred to in paragraph 11 of that Prudential Standard, and initial margin must be posted and collected for all new non-centrally cleared derivative transactions, with the exception of physically settled foreign exchange forwards and swaps, between an APRA covered entity and a covered counterparty. APRA has adopted the internationally agreed phase-in for the entry into application of the initial margin requirements, the thresholds used for the phase-in expressed in AUD should be considered equivalent to the thresholds referred to in Article 35 of Delegated Regulation (EU) 2016/2251. Similar exemptions for physically settled foreign exchange forwards and swaps and for single-stock equity options or index options are provided for in Delegated Regulation (EU) 2016/2251. This Decision should therefore only apply to OTC derivatives contracts that are subject to margin requirements under Regulation (EU) No 648/2012 and Prudential Standard CPS 226.