COVID-19 and CCP Risk Management Frameworks

After the market turmoil caused by the COVID-19 pandemic in March and April 2020, the ISDA Clearing Member Committee analyzed how central counterparty (CCP) risk management frameworks reacted to the crisis, based on feedback from CCPs.

The results show CCPs dealt with the crisis well, managing record volumes while most of their staff worked from home. In total, there were three member defaults or close-outs, none of which threatened financial stability. This reflects a more stable financial system overall: clearing members are much better capitalized and hold more liquidity compared to the last crisis.

However, some issues did emerge. Procyclical initial margin requirements exacerbated market stress at certain points. Clearing members also lacked timely information about backtesting breaches and procyclicality in margin models. The paper makes recommendations to address both of those points.

ISDA response to ESMA MiFIR Review Consultation

On July 11, ISDA submitted a response to the European Securities and Markets Authority's (ESMA) fourth package of Level 2 consultation under the Markets in Financial Instruments Regulation Review (MiFIR), on transparency for derivatives, package orders and input/output data for...

ISDA Presents Lock-Up Agreement Proposal

ISDA is pleased to present the proposed Lock-Up Agreements and CDS – Proposed Auction Solution. “Lock-Up Agreements” are market-wide arrangements, broadly standardized and predominantly integrated with court sanctioned restructuring or bankruptcy processes. Numerous end users will sign material Lock-Up Agreements...