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
January 6, 2014
ISDA, GFMA & IIF Letter to the Trading Book Group (“TBG”) of the Basel Committee on Banking Supervision (“BCBS”) re. the Fundamental Review of the Trading Book (FRTB): Request to Revise the FRTB and Quantitative Impact Studies (“QIS”) Timelines
On January 6, the International Swaps and Derivatives Association, Inc. (“ISDA”), Global Financial Markets Association (“GFMA”) and the Institute of International Finance ("IIF") wrote to the TBG of the BCBS to request an extension of the FRTB and QIS timelines amid concerns that the announced timeline for the industry to run QIS and for the FRTB to be completed by the TBG is insufficient to properly strengthen the trading book framework, given the magnitude of the required changes to existing infrastructures and the wide ranging objectives of the TBG.
060114_Joint trade letter to TBG final.pdf
January 3, 2014
ISDA, GFMA & IIF initial Industry Comment Letter to the Basel Committee on the Proposed Revised Standardized Approach of the BCBS Second Consultative Document Fundamental Review of the Trading Book
On January 3, the International Swaps and Derivatives Association, Inc. (“ISDA”), Global Financial Markets Association (“GFMA”) and the Institute of International Finance ("IIF") (together “the Associations”), submitted their initial response on the Proposed Revised Standardized Approach of the Basel Committee on Banking Supervision (“BCBS”) Second Consultative Document Fundamental Review of the Trading Book dated October 2013 (“Fundamental Review” or “FRTB”). The letter focuses solely on the proposed revised standardized framework.
Industry Letter to the TBG - BCBS 265 Revised Standard Approach Proposal.pdf
December 13, 2013
ISDA response to CPSS-IOSCO Consultative report: Public quantitative disclosure standards for CCPs
ISDA responded to the CPSS-IOSCO consultative report on Public quantitative disclosure standards for CCPs issued for comment on October 15. The consultation aims to increase the depth and consistency of quantitative disclosure related to CCPs to allow stakeholders to more comprehensively understand, evaluate and manage the risks inherent with their participation at any given CCP. The ISDA response comments to particular questions detailed in the consultation supporting overall that more detailed and standardized quantitative data, available consistently across CCPs, will foster greater interaction between CCPs and their clearing participants that will promote more robust risk management practices and allow clearing participants to more effectively assess, monitor and manage CCP risk exposures. The Disclosure Framework, issued as response to key consideration 5 of principle 23 of the CPSS- IOSCO Principles for financial market infrastructures (PFMIs), will underpin clearing participant due diligence and risk assessment of CCPs.
ISDA Response to CPSS114 Quantitative Disclosures for CCPs (18Dec13)-.pdf
December 10, 2013
Standard Initial Margin Model for Non-Cleared Derivatives
In order to facilitate the introduction of final BCBS-IOSCO guidelines for margin requirements for non-centrally cleared derivatives, ISDA is proposing a standard initial margin model (SIMM) which could be used by market participants. A common methodology would have several key benefits to the market, such as permitting timely and transparent dispute resolution and allowing consistent regulatory governance and oversight. This whitepaper discusses the model.
SIMM for Non-cleared 20131210.pdf
November 21, 2013
ISDA response to HMT consultation on Secondary Legislation for Non-Bank Resolution Regimes
On November 21, ISDA responded to the HMT consultation that seeks to widen the Special Resolution Regime (SRR) established by the Banking Act 2009 to include central counterparties, among others, as provided by the Financial Services Act 2012. ISDA additionally submitted a response specific to investment firms and banking group companies. The draft secondary legislation accompanying the consultation will be laid before Parliament. Once Parliament has approved those instruments that require approval, the secondary legislation will be made and the new SRR powers will come into force shortly after.
ISDA response to HMT consultation on Secondary Legislation for Non-Bank Resolution Regimes - Investment Firms & BGC (21Nov13).pdf ISDA response to HMT consultation on Secondary Legislation for Non-Bank Resolution Regimes (21Nov13).pdf
November 14, 2013
ISDA, GFMA & IIF further response to the BCBS Consultative Document "The non-internal model method for capitalizing counterparty credit risk exposures"
On November 14, the International Swaps and Derivatives Association, Inc (“ISDA”), the Global Financial Markets Association (“GFMA”) and the Institute of International Finance (“IIF”) (together “the Associations”) sent a further response to the Basel Committee on Banking Supervision (BCBS) Consultative Document "The non-internal model method for capitalizing counterparty credit risk exposures" (June 2013) related to the Definition of Notional Amounts.
BCBS 254 NIMM - Further Response Notional Definitions.pdf
November 8, 2013
ISDA, GFMA & IIF initial Industry Comment Letter on the QIS of the BCBS Second Consultative Document Fundamental Review of the Trading Book
On November 8, the International Swaps and Derivatives Association, Inc (“ISDA”), Global Financial Markets Association (“GFMA”) and the Institute of International Finance ("IIF") (together “the Associations”), submitted their initial response on the Quantitative Impact Study (“QIS”) of the Basel Committee on Banking Supervision (“BCBS”) Second Consultative Document Fundamental Review of the Trading Book dated October 2013 (“Fundamental Review” or “FRTB”). A full and detailed evaluation of the QIS feasibility will follow prior to the January 31, 2014 deadline.
Industry Letter to the TBG - BCBS 265 QIS.pdf
October 16, 2013
ISDA response to the EBA survey regarding the Margin Period of Risk for clearing members’ exposures to clients described in Article 304 of the CRR IV
ISDA responded to the European Banking Authority (EBA) Survey on capital requirements for clearing members’ exposures to clients – CRR, Article 304, submitted on August 26, 2013. The survey aims to gather the industry’s preliminary view on this topic. EBA plans to publish a consultation paper at least six months before the formal deadline of June 2014 and to perform a quantitative impact assessment in the same period to support the decisions of the final draft RTS.
ISDA Response to EBA Survey re CRR Art 304.pdf
October 15, 2013
Response to FSB Consultation on Application of the Key Attributes of Effective Resolution Regimes to Non-Bank Financial Institutions
The Associations' (IIF, ISDA, TCH, GFMA) response to the Financial Stability Board consultation on Application of the Key Attributes of Effective Resolution Regimes to Non-bank Financial Institutions. The response is based upon key principles that should be considered when evaluating recovery and resolution proposals to ensure that an effective and viable recovery and resolution framework is implemented.
10152013 FSB FMI Letter.pdf
October 11, 2013
ISDA/IIF/TCH final response to the CPSS-IOSCO consultative report Recovery of financial market infrastructures
On October 11, ISDA, the Institute of International Finance Inc. (IIF) and The Clearing House (TCH) submitted their response to the CPSS-IOSCO consultative report, Recovery of financial market infrastructures, issued for comment on August 12, 2013. The report offers guidance related to financial market infrastructures (FMIs) recovery and provides a meaningful response to ensure a viable framework is adopted. Effective recovery, continuity and resolution mechanisms for FMIs are critical to the efficient operation and sustainability of the financial markets. The Associations’ response focuses on central counterparties (CCPs) which will arguably become the most systemically relevant infrastructure in the financial markets as a result of regulatory reform already enacted. Also attached is the ISDA CCP Loss Allocation at the End of the Waterfall technical paper (issued in August 2013) which forms part of the Associations’ response to this report.
Industry Response to CPSS109 1 of 2.pdf Industry Response to CPSS109 2 of 2.pdf