Risk Management

ISDA’s Risk Management Team works with members, regulators and policy makers to develop rules which ensure that appropriate, prudent and risk sensitive capital charges are applied uniformly to the various financial risks faced by the industry. The group continually seeks to define best practice in each area and assist all stakeholders in achieving this.

Click here for additional and archived risk management materials.


DateTitle / DescriptionDocuments
April 1, 2015
Joint Association response to the BCBS capital floors consultation
On March 27, ISDA responded jointly with other associations (IIF/GFMA/CREFC) to the Basel Committee on Banking Supervision consultation on capital floors.
Standardized Approach Capital Floors Final Comment Letter.pdf
March 23, 2015
ISDA/GFMA/IIF letter on the net stable funding ratio (NSFR)
On March 20, the associations (ISDA/GFMA/IIF) submitted a joint letter to both the co-chairs of the Basel Committee on Banking Supervision working group on liquidity and the Financial Stability Board, supporting the further review of the treatment of margining of derivatives in the NSFR and encouraging regulators to conduct additional quantitative analysis and consider alternative approaches, if necessary.
letter to co-chairs BCBS Working Group on Liquidity 20 March 15.pdf
February 26, 2015
ISDA/GFMA/IIF letters on the Fundamental Review of the Trading Book
The joint associations (ISDA/GFMA/IIF) submitted on February 20 two letters on the Fundamental Review of the Trading Book (FRTB) to the Basel Committee. The first letter is addressed to the co-chairs of the Basel Trading Book Group (TBG), and is in response to the third FRTB consultation that was published by the Basel Committee in December 2014. The letter notes that since the industry is still working through the text of the third FRTB consultation and the QIS instructions, follow-up supplementary materials may be submitted to the TBG in the coming weeks. The second letter is addressed to the secretary general of the Basel Committee, and expresses the industry's concerns about the timeline announced in the third FRTB consultation paper to complete the FRTB framework by the end of 2015 and continue the calibration work in 2016 and beyond.
1b. Trade Associations Response - FRTB CP3_20150220_FINAL.pdf 2b. FRTB  Letter to Secretary General Coen_20150220_.pdf
February 11, 2015
ISDA Webcast: Preparing for WGMR Implementation
This webcast outlines the scope of the new requirements and describes the ISDA initiatives that are under way to prepare for the rules. This includes progress on developing a standard initial margin model (SIMM) and adaptations to collateral documentation.

ISDA Webcast: Preparing for WGMR Implementation
ISDA WGMR webcast FINAL slides.pdf
January 26, 2015
CCP Default Management, Recovery and Continuity: A Proposed Recovery Framework
CCPs are required to develop recovery plans to avert a threat to their viability and ensure they can maintain the continuity of critical services without requiring the intervention of resolution authorities or resorting to public money. The ISDA CCP Default Management, Recovery and Continuity paper proposes a framework for recovery and sets out tools that can be used to re-establish a matched book following the default of one or more clearing members. The paper does not cover non-default losses and those relating to liquidity shortfalls.
CCP Default Management recovery and continuity 26-01-2015.pdf
January 16, 2015
ISDA responds to BoE consultation on CCP interoperability
On January 16, ISDA responded to the Bank of England’s consultation on central counterparty interoperability.
ISDA's response to the BoE CCP inter-operability paper Jan 16 2014 - Final.pdf
December 5, 2014
ISDA Response to OTC DAT Assessment of incentives to clear centrally
This letter provides brief initial comments from the Association on the assessment of incentives to clear report (the Report) published in October by the OTC Derivatives Assessment Team, established by the OTC Derivatives Coordination group (the Group). The aim is to bring certain issues, which we believe to be critical to the incentives to clear debate, to the immediate attention of the Group. The Association intends to follow this letter up with detailed and technical support for the issues raised in due course.
ISDA Response to OTC DAT Assessment of Incentives to Clear Dec 14 (2).pdf
November 25, 2014
Principles for CCP Recovery
Central counterparties (CCPs) have become a crucial part of the derivatives market infrastructure, supported by regulation that requires standardized OTC derivatives to be cleared. Given the systemic importance of these entities, ISDA and its members believe particular attention needs to be paid to ensuring the risks of a CCP reaching the point of non-viability are minimized. If that point is reached, however, a clearly defined recovery plan needs to be in place that does not involve the use of public money. The ISDA Principles for CCP Recovery paper identifies the key issues that need to be addressed, and makes several recommendations on how to proceed.
Principles for CCP Recovery FINAL.pdf
November 25, 2014
ISDA letter to the CFTC on margin requirements for uncleared swaps for swap dealers and major swap participants
ISDA provides comments regarding the recently released notice of proposed rules and advance notice of proposed rulemaking ("CFTC Margin Proposal") concerning margin requirements for non-cleared swaps and the implementation of the related statutory provisions enacted by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). Our analysis of the proposed rules and response to the proposed rulemaking addresses three critical themes: providing for implementation without excessive disruption; addressing systemic risk in an appropriate manner; and developing a workable cross-border framework.
ISDA_-_CFTC_Proposed_Margin_Rules_Letter 112414.pdf
November 25, 2014
ISDA letter to the PRs on margin and capital requirements for covered swap entities
ISDA provides comments to the Prudential Regulators (the "PRs") regarding the recently released notice of proposed rulemaking and request for comments ("PR Margin Proposal") concerning margin and capital requirements for non-cleared swaps and non-cleared security-based swaps and the implementation of the related statutory provisions enacted by Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). Our analysis of the proposed rules addresses three critical themes: providing for implementation without excessive disruption; addressing systemic risk in an appropriate manner; and developing a workable cross-border framework.
ISDA_-_PR_Proposed_Margin_Rules_Letter 112414.pdf