Notional amount outstanding is a widely used metric in the derivatives market, but it is more a measure of traded volume or transaction size and less a measure of risk. A recent research paper published by the US Commodity Futures Trading Commission (CFTC) highlights this point, and introduces an alternate metric for the interest rate derivatives market.
However, many derivatives regulations employ notional amount as a trigger or threshold to determine whether and how certain requirements will apply. This paper highlights a number of areas where derivatives rules are based on notional amount and similar measures. In so doing, the intention is to contribute to the important policy discussion about the merits of a risk-based regulatory framework.
Documents (1) for Uses of Notional Amount in Derivatives Regulation
Latest
US Treasury Repo Clearing Indicators May 2026
The ISDA-Actrix US Treasury Repo Market Clearing Indicators illustrate central clearing adoption in the US Treasury repo market. Sponsored cleared repo volumes are used as a proxy to monitor client participation in central clearing, the key objective of the Securities...
ISDA, FIA, GFMA, CMC, CMCE Respond to IOSCO on Best Practices for OTC Commodity Derivatives
ISDA, FIA, the Global Financial Markets Association (GFMA), the Commodity Markets Council (CMC) and the Commodity Markets Council Europe (CMCE), have responded to the International Organization of Securities Commissions' (IOSCO) consultation report on best practices for over-the-counter (OTC) commodity derivatives...
Joint Response to 2026 US G-SIB Surcharge Proposal
On June 18, ISDA, the Securities Industry and Financial Markets Association and the Institute of International Finance submitted a joint response to US agencies on proposed changes to the surcharge for global systemically important banks (G-SIBs). The associations welcome the...
Eyeing the Basel III Finish Line
An effective regulatory capital framework relies on multiple ingredients, from appropriate drafting to rigorous testing and consultation. Even minor calibration distortions can inflate capital requirements, which could negatively affect the capacity of banks to support deep and liquid markets, with...