Creating Value – IQ June 2025

Ever since its establishment 40 years ago, ISDA has worked to enhance the safety and efficiency of derivatives markets. That has motivated everything we do – from the development of standard documentation and the rollout of new digital solutions to our responses to regulatory consultations.

In our view, safe and efficient markets are critical prerequisites for liquidity and competition – and that matters. Without deep and liquid markets, it would be more difficult and expensive for corporations, governments, pension funds and insurance companies to use derivatives to transfer unwanted risks, enhance returns and manage their liquidity needs.

The impact of that would be significant. According to a new ISDA report on the value of derivatives, 87.1% of nearly 1,200 major companies in seven major stock indices use over-the-counter derivatives for a variety of reasons, including locking in financing terms, reducing costs and enhancing financial performance. This helps create predictability, which gives companies the confidence to borrow, invest and hire.

In this issue of IQ, we spotlight that report and explore how and why different types of firms use derivatives and the value they bring to individual companies and the broader economy.

The report was published to coincide with ISDA’s 40th anniversary, and we continue our IQ anniversary series by looking at how ISDA and its members have worked to address some of the biggest challenges ever to face derivatives markets – from the rollout of margin requirements for non-cleared derivatives to the transition from LIBOR. The solutions that were developed – the ISDA Standard Initial Margin Model and the IBOR fallbacks – are great examples of ISDA fulfilling its core mission: maintaining the safety and efficiency of derivatives markets.

This issue also includes a review of ISDA’s 39th Annual General Meeting, which took place in Amsterdam last month, with nearly 800 delegates from around the world. The flagship event was an opportunity to reflect on ISDA’s achievements over the past 40 years and to consider the future trends that will shape the derivatives market. Save the date for ISDA’s 40th AGM, which will take place in Boston on April 28-30, 2026.

Click on the attached PDF to read IQ in full.

Documents (1) for Creating Value – IQ June 2025

ISDA Clearing Model Comparison

On February 1, 2024, ISDA published a comparison of available US Treasury (UST) clearing models, as well as models for clearing repos at other central counterparties (CCPs) globally and models for clearing derivatives. This comparison is intended to help market...

FRTB Impact on Correlation Trading

The capitalization of the correlation trading portfolio (CTP) under the Fundamental Review of the Trading Book will have an adverse economic impact for users of these instruments. In particular, there is a lack of clarity and consistency in the application...

A Path to Greater CFTC-SEC Alignment

Earlier this week, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) held a roundtable on regulatory harmonization – an initiative we wholeheartedly support. The US regulatory framework has evolved over time to facilitate financial markets...