ISDA, the Futures Industry Association (FIA) and the Institute of International Finance (IIF) appreciate the opportunity to comment on the consultation paper “Financial resources to support CCP resolution and the treatment of CCP equity in resolution” and believe that the consultation paper is another welcome step towards developing CCP resolution regimes.
In our response, we make the following points:
Part I: Assessing the adequacy of financial resources to support CCP resolution
- The Associations support the five-step approach and more quantitative clarity
- The five-step process should be further developed into a CCP capital requirements framework
- The need for increased transparency and testing of the resolution plans
Part II: Treatment of CCP equity in resolution
- We welcome the focus of the consultation paper on ways to expose CCP equity in resolution.
- Equity should be fully loss bearing in line with corporate finance principles
- The NCWO counterfactual should be clarified
- Participants should be compensated for the use of recovery and resolution tools
- Clear distinction between recovery and resolution
- Resolution tools should not make the crisis worse
- Resources to cover losses should be different from those set aside for recapitalization
- Incentives need to be aligned
- CCPs should have more SITG in two tranches
The Associations will continue to work with the FSB as they develop their recommendations.
Documents (1) for ISDA, FIA and IIF Respond to FSB’s Consultation on CCP Resources in Resolution
Latest
ISDA AGM Studio: Emmanuel Geinoz and Eleanor Kelly
Five jurisdictions went live with revised derivatives reporting rules in 2024, with more to follow in 2025 and beyond, putting reporting teams under extreme pressure to implement accurately and on time to avoid regulatory penalties. Emmanuel Geinoz, market infrastructure and...
ISDA AGM Studio: Tyler Wellensiek, Stephen Berger
The first phase of the Securities and Exchange Commission’s Treasury clearing mandate will come into effect in December 2026 – a requirement that will have a significant impact on both US and non-US market participants. Tyler Wellensiek, ISDA board member...
ISDA AGM Studio: Jacques Vigner, BNP Paribas
Jacques Vigner, ISDA board member and chief strategic oversight officer for global markets at BNP Paribas, speaks with Mark Gheerbrant, global head of risk and capital at ISDA, on the key obstacles to a consistent, risk-appropriate capital framework and how to...
ISDA AGM Studio: Future Leaders in Derivatives
Following publication of the latest whitepaper from the ISDA Future Leaders in Derivatives (IFLD) program, Collateral and Liquidity Efficiency in the Derivatives Market: Navigating Risk in a Fragile Ecosystem, Joel Clark talks to IFLD participants Koen Ottenheijm, senior treasury and...