On February 7, ISDA submitted its response to the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) discussion paper on client clearing: access and portability. In this discussion paper, CPMI and IOSCO cover two topics:

• New direct or sponsored access model for clients; and
• Porting in case of clearing member default.

ISDA welcomes the discussion paper. On direct or sponsored access models, ISDA members are generally supportive of tools that provide better access to clearing for clients or makes client clearing more cost-efficient, assuming any significant new risks these tools introduce into the clearing system can be managed by central counterparties (CCPs) and client clearing service providers (CCSP). ISDA, however, identifies some risks with these models that need to be carefully managed. ISDA concludes that despite such new models, the issue of capacity constraints in access to client clearing has not been solved yet.

On porting, ISDA members agree that two key strategies to support porting are for clients to have backup CCSPs and for CCPs to develop a porting game plan. However, neither strategy is without drawbacks and ultimately success hinges on the capacity of other CCSPs. ISDA proposes to review how regulation could be changed to provide more economic incentives for CCSPs to provide clearing services.