Capitalization of Equity Investments in Funds Under the FRTB

On January 10, 2022, ISDA published a whitepaper, Capitalization of Equity Investment in Funds Under the FRTB Framework.

Funds perform a key role in the economy, and banks play an important part in facilitating indirect investments in funds for their clients, offering structured investment and hedging solutions and providing an effective and liquid market. However, the treatment of equity investments in funds (EIIFs) under the Fundamental Review of the Trading Book is very conservative and may unduly increase the cost of providing fund investment solutions.

This paper outlines the various regulatory prescribed methodologies and the operational challenges faced by banks in implementing them. The paper also explores vendor solutions and proposes alternative methods for calculating capital requirements for EIIFs.

Documents (1) for Capitalization of Equity Investments in Funds Under the FRTB

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ISDA Response on Clearing Costs

On September 8, ISDA responded to consultation by the European Securities and Markets Authority (ESMA) on a draft regulatory technical standard on clearing fees and associated costs (article 7c(4) of the European Market Infrastructure Regulation (EMIR)). In the response, ISDA...