ISDA published its whitepaper (available here) in 2019 to inform market participants and regulators of the unique challenges that economic sanctions programs could present to over-the-counter (OTC) derivatives markets. Since that time, there has been a significant increase in the use of economic sanctions in furtherance of foreign policy goals in the US, the EU, the UK and beyond, which have raised issues for derivatives users. These measures include the US Chinese Military company sanctions of 2020 and 2021 as well as the sanctions programs implemented across the globe in response to Russia’s invasion and ongoing occupation of Ukrainian territory from February 2022. This paper examines the impact that sanctions programs have had on derivatives transactions since the publication of the 2019 whitepaper, considering the novel issues market participants have faced. It also assesses if sanctions programs have been implemented in a manner broadly consistent with principles set forth in the whitepaper, and proposes where additional action or guidance from sanctions authorities would further reduce uncertainty around the scope of the sanctions measures and the related relief and further reduce the potential adverse effects on non-sanctioned entities.
Documents (1) for Economic Sanctions Programs and Derivatives
Latest
ISDA Omnibus Canadian Representation Letter
On September 2, ISDA published the Omnibus Canadian Representation Letter, which combines previously published representation letters drafted to assist firms in compliance with Canadian trade reporting, business conduct, regulatory margin and clearing classification rules. The Omnibus Canadian Letter is designed...
Joint Response on Cross-margining
On August 31, ISDA and FIA submitted a letter to the US Commodity Futures and Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) on the agencies’ joint request for comment on the implementation of portfolio margining and cross-margining...
Accounting for Carbon Credits: Latest Developments
This paper updates and extends the analysis set out in ISDA’s October 2023 paper on accounting for carbon credits. While preserving the original focus on the accounting treatment of voluntary carbon credits (VCCs) and compliance carbon credits (CCCs), it expands...
Response to SEC on FICC Guaranty Fund
On September 1, ISDA and FIA submitted a joint response to the US Securities and Exchange Commission (SEC), supporting the Fixed Income Clearing Corporation’s (FICC) proposal to establish a dedicated guaranty fund at its government securities division (GSD). FICC had...
