On September 28, ISDA responded to a request for comment from the US Commodity Futures Trading Commission (CFTC) on the affiliations between derivatives clearing organizations (DCOs), designated contact markets or swap execution facilities and intermediaries such as futures commission merchants (FCMs) and other market participants. The request for comment also looked at situations where the DCO has only one affiliated FCM, referred to as direct clearing.
In the response, ISDA focuses on the relationship between DCOs and affiliated clearing members (CMs). ISDA identifies various conflicts of interest and proposes mitigants, concluding that existing CFTC regulations do not sufficiently address potential issues when a DCO (as a self-regulatory organization) has supervisory authority over an affiliated intermediary. ISDA notes that some of the mitigants proposed by the CFTC may not adequately address the conflicts of interest inherent in a DCO’s relationship with an affiliated intermediary.
On direct clearing, ISDA identifies several issues that would need to be considered and asks the CFTC to study this further and consult the industry again before allowing such a structure.
Documents (1) for ISDA Response to CFTC on Conflicts of Interest Between DCOs and Affiliated Clearing Members
Latest
Key Trends in OTC Derivatives Market H2 2025
The latest data from the Bank for International Settlements over-the-counter (OTC) derivatives statistics shows an increase in notional outstanding of OTC derivatives during the second half of 2025 compared to the same period in 2024. Notional outstanding rose across all...
ISDA-SIFMA letter to SEC on Swap Dealer Thresholds
ISDA and SIFMA have submitted a comment letter to the SEC in response to the staff report on the definitions of “security-based swap dealer” and “major security-based swap participant.” The associations recommend maintaining the current de minimis thresholds for both...
ISDA responds to RBI consultation on SA-CCR
On July 1, ISDA responded to the Reserve Bank of India's (RBI) consultation on draft amendment directions on the standardized approach for counterparty credit risk (SA-CCR). ISDA broadly welcomes the RBI's move to SA-CCR and updated capital treatment for exposures...
Data Subject Access Request Form
Pursuant to its mission to promote safe and efficient markets within the over-the-counter (OTC) derivatives industry, The International Swaps and Derivatives Association, Inc. (ISDA) processes personal data of its employees, members and non-members (for example individuals attending ISDA conferences or...