On April 24, ISDA responded to the Singapore Exchange’s (SGX) consultation paper on revised limit on clearing members’ liability for multiple defaults. In its consultation paper, SGX proposed to limit a non-defaulting clearing member’s liability to meet multiple default losses arising within a 30-day period to three times the aggregate of its funded and unfunded clearing fund contributions (Prescribed Contribution) as determined at the start of the 30-day period and is independent of a clearing member’s resignation.
In the response, ISDA highlighted that while members appreciate SGX’s effort to cap clearing members’ liability without resignation, members feel that the limit of three times a clearing members’ prescribed contribution is high and recommend a lower cap in line with other established central counterparties and industry best practice, which is one or two times of the clearing member’s funded default fund. Members also feel that the calculation methodology of the clearing member’s clearing fund contribution available to meet losses arising from multiple defaults is complex and would welcome a simpler framework.
Documents (1) for ISDA Response to Clearing Member Default Liability Consultation
Latest
Response to FASB on KPIs for Business Entities
On April 30, ISDA submitted a response to the Financial Accounting Standards Board’s (FASB) proposal on financial key performance indicators (KPIs) for business entities. In the response, ISDA addressed the implications of KPI standardization, its potential impact on financial reporting...
Updated OTC Derivatives Compliance Calendar
ISDA has updated its global calendar of compliance deadlines and regulatory dates for the over-the-counter (OTC) derivatives space.
Response on Commodity Derivatives Markets
On April 22, ISDA and FIA submitted a joint response to the European Commission’s (EC) consultation on the functioning of commodity derivatives markets and certain aspects relating to spot energy markets. In addition to questions on position management, reporting and...
Episode 50: The Value of Derivatives
A new report from ISDA shows that companies all over the world use derivatives to alleviate uncertainty, transfer risk and enhance profitability. ISDA discusses the findings with Boston Consulting Group’s Roy Choudhury. Please view this page via Chrome to access...