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 FCA on Commodity Derivatives Clearing
On April 9, ISDA, the Commodity Markets Council Europe (CMCE), Energy Traders Europe (ETE) and FIA jointly responded to Chapter 7 of the UK Financial Conduct Authority’s (FCA) Quarterly Consultation CP26/8 on increasing the clearing threshold for commodity derivatives under the UK...
Response on EC’s SFR Proposal
On April 9, ISDA published technical comments on the European Commission’s (EC) proposed Settlement Finality Regulation (SFR) as it applies to designated EU systems and registered third-country systems. One significant concern is that the scope of insolvency protections provided to...
Natixis CIB Adopts ISDA’s DRR
ISDA has announced that Natixis CIB has adopted ISDA’s Digital Regulatory Reporting (DRR) solution, enabling the bank to meet regulatory reporting requirements more efficiently and accurately. The ISDA DRR uses the Common Domain Model (CDM) – an open-source data standard...
Paper on MIFIR PTT
On April 7, ISDA, the Association for Financial Markets in Europe (AFME), the International Capital Market Association (ICMA) and the European Banking Federation (EBF) published a paper on proposals relating to post-trade transparency (PTT) under the Markets in Financial Instruments...