Thank you to all of the firms that submitted responses to ISDA’s survey regarding ongoing efforts to incentivize and/or potentially require additional clearing of US Treasury (UST) securities and repos. ISDA has published a report summarizing the results of the survey on an aggregated and anonymized basis.
ISDA’s survey sought feedback on the legal, operational, regulatory (including market regulation and capital implications) and policy issues associated with UST clearing, with a focus on client clearing and how reforms in this market would impact the derivatives markets. ISDA conducted the survey in response to discussions by policy makers and market participants about the merits of further clearing of US Treasuries and whether this would strengthen the resilience of the market during stress events.
The results of the survey shows there is a wide variety of views on whether increased clearing would materially improve the resilience and efficiency of cash Treasury securities and repos, suggesting further research on the costs and benefits is necessary. While most respondents were generally supportive of clearing, there was little backing for broad clearing mandates, with warnings that it could result in some participants reducing their activity or withdrawing from the market, potentially reducing liquidity.
Documents (1) for ISDA US Treasury Clearing Survey Results
Latest
ISDA Paper on FRTB Rules in Brazil
On March 24, ISDA submitted a paper to Banco Central do Brazil’s (BCB) on its implementation of the revised market risk framework under the Fundamental Review of the Trading Book (FRTB), which represents an important step toward strengthening prudential standards...
IQ Interview with Mark Uyeda
Mandatory clearing of US Treasury securities is due to begin at the end of this year under rules finalized by the Securities and Exchange Commission (SEC) in 2023. SEC commissioner Mark Uyeda talks to IQ about the benefits of clearing...
Response to FCA on CFI Codes for Transparency
On March 19, ISDA responded to Chapter 3 of the UK Financial Conduct Authority’s (FCA) Quarterly Consultation CP26/8 on transparency requirements for financial instruments under Market Conduct Sourcebook (MAR) 11. Sections 3.11-3.13 of the consultation paper explain a discrepancy between...
Why We Need Safe and Efficient SFT Markets
Securities financing transactions (SFTs) play a vital role in fostering liquidity, mobilizing collateral and supporting the smooth functioning of derivatives markets. But during periods of stress, secured funding markets often come under pressure just when they’re needed most, with reduced...
