The expanded and increasingly novel use of targeted economic sanctions programs in recent years has potential ramifications for the derivatives market and there has been limited and inconsistent guidance on how, if at all, sanctions programs are intended to impact derivatives. This paper examines unique aspects of derivatives transactions that can present issues in interpreting how sanctions programs should apply in the context of derivatives and analyses these issues in the context of recent sanctions program experiences. This paper also proposes eight principles for sanctions authorities to be cognizant of when introducing new sanctions programs or extending existing sanctions programs to ensure the continued safe operation of derivatives markets and minimize market disruption and economic consequences for non-sanctioned entities, without compromising foreign policy or national security goals, conferring any benefit on sanctioned entities or otherwise harming the objectives of any sanctions program.
Click on the attached PDF to read the full paper.
Documents (1) for Economic Sanctions Programs & Derivatives
Latest
Expanding the Universe of Eligible VM
ISDA conducted a series of interviews with buy- and sell-side firms to understand the drivers of a growing use of non-cash assets as variation margin (VM) for non-cleared over-the-counter (OTC) derivatives and the barriers that remain to expanding the use...
ISDA Response on Hedge Accounting Guidance
On August 14, ISDA responded to an exposure draft from the Financial Accounting Standards Board (FASB). ISDA broadly supports the FASB’s proposed targeted improvements to hedge accounting, including allowing interest rate hedging of held-to-maturity (HTM) debt securities, recognizing all Secured...
Joint Response to EBA Consultation
On August 12, ISDA and the Association for Financial Markets in Europe (AFME) responded to the European Banking Authority’s discussion paper on certain taxonomy key performance indicators (KPIs) and other aspects of the Disclosures Delegated Act under Article 8 of...
Response to JSCC on Clearing Fund Consolidation
On August 12, ISDA responded to the Japan Securities Clearing Corporation’s (JSCC) consultation on its proposal to consolidate clearing fund consumption, calculation and deposit segmentation across six clearing qualifications under the Financial Instruments and Exchange Act. ISDA members broadly support...