On February 5, ISDA and FIA responded to the Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO) consultation on the management of general business risks and general business losses by financial market infrastructures (FMIs). The associations welcome the consultation’s emphasis that FMIs should maintain sufficient resources to bear general business losses (GBLs) for which they are solely responsible, given these losses stem from risks under FMI control and are not appropriately allocated to participants. The associations support a more prescriptive approach to addressing GBLs, building on observations from previous Level 3 assessments that identified widespread inconsistencies and gaps in FMI practices.

The associations call for greater clarity and consistency in determining loss scenarios, the sizing of liquid net assets funded by equity (LNAFE) and expectations for transparency, governance and stakeholder involvement. Key recommendations include increasing the minimum LNAFE requirement beyond six months of operating expenses, adopting common scenario standards across FMIs, enhancing disclosure of risk management assumptions and resources, and conducting post guidance assessments to promote global convergence. The associations reiterate that variation margin gains haircutting should not be used to allocate GBLs, given its misalignment with the nature of such losses and the potential destabilizing effects on market participants. Overall, the response supports the CPMI–IOSCO initiative while urging globally consistent implementation that strengthens accountability, improves comparability across FMIs and enhances resilience.