|Date||Title / Description||Documents|
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.
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.
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.
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.
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.
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.
August 22, 2014
ISDA letter to the ESAs on Estimates of numbers of accounts affected by IM segregation requirements, to demonstrate operational challenges
The margin rules proposed by the European Supervisory Authorities (the "ESAs") require IM to be
segregated from proprietary assets on the books and records of a third party holder or custodian,
or via other legally effective arrangements. In addition, the rules require cash IM to be segregated individually, unless other legally effective arrangements are in place to segregate it from proprietary assets. Several additional clarifications and issues are described in the letter sent by ISDA to the ESAs in July 20143. As proposed, we illustrate below the unintended consequences arising from the IM segregation
August 22, 2014
ISDA letter to the ESAs on Proposed Margin Rules
ISDA is concerned about the practical consequences of certain provisions of the margin requirements under the Draft RTS on risk-mitigation techniques. These concerns were raised in brief in the letter we sent to the ESAs on 14 July commenting generally on the Draft RTS (the “July Letter”). This letter is intended to provide further detail and we would welcome the opportunity to discuss this further with the ESAs.
August 18, 2014
ISDA letter to BCBS/IOSCO on timing issues for margin rules for uncleared derivatives
ISDA member firms participating in the industry-led WGMR implementation initiative are concerned about the market’s ability to meet an implementation date of December 2015. This concern is based not only on the significant infrastructural changes required of market participants but also due to the significant coordination effort required of global regulators. In summary, ISDA proposed that rules become effective two years after rules are clarified and finalized in Europe, Japan, and USA. ISDA also proposed a phase-in schedule for upcoming Variation Margin (VM) requirements and urged regulators to avoid imposition of implementation dates during the year end code freeze periods. Based on the above, the practical start date of the WGMR requirements would be April 2017.
August 18, 2014
ISDA letter to the ESAs on Proposed Margin Rules: Documentation Requirements
ISDA is concerned about the documentation that is required for parties to qualify for exemptions from the margin requirements under the Draft RTS on risk-mitigation techniques. This documentation is not required by Regulation (EU) No 648/2012 ("EMIR") and imposing such requirements would result in very significant administrative and operational burdens. In the letter, we set out proposed alternative language that could be used to permit exemptions without documentation requirements. This letter is a supplement to the letter we sent to the ESAs on 14 July commenting generally on the Draft RTS.