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.
Documents (1) for ISDA Responds to CPMI-IOSCO on Client Clearing
Latest
The ISDA Notices Hub: One Year On
In times of war, armed forces are often required to mobilize over large distances at short notice. The most dreaded response to the question of how they are to be transported is ‘by LPC’, meaning ‘leather personnel carrier’ – the...
ISDA Response to OSC Call for Feedback
On June 26, ISDA responded to the Ontario Securities Commission’s (OSC) consultation on facilitating access to its regulatory framework and reducing the burden for capital markets participants by publishing a machine-readable dataset of regulatory instruments. ISDA's comments are supportive of...
ISDA Comments on EP's MISP Draft Reports
On July 15, ISDA shared comments with policymakers in the European Union on the European Parliament’s (EP) draft reports by Member of the European Parliament (MEP) Markus Ferber and MEP Eero Heinäluoma on the Market Integration and Supervision Package (MISP)....
Building Markets, Creating Opportunity
Deep and liquid derivatives markets are fundamental to the development of well-functioning financial markets and healthy economies. They support lending, investment and financial stability, creating the certainty needed for economic growth. But strong derivatives markets do not emerge by chance....