On May 8, ISDA and the FIA responded to the Monetary Authority of Singapore’s (MAS) consultation on recovery and resolution planning and enhancement of resolution powers for capital market infrastructures.

The response supports the proposed framework for recovery and orderly wind-down planning for capital market infrastructures, while recommending greater clarity and safeguards on certain aspects of the framework. Key points include clearer specification of recovery plan content and governance, stronger transparency and engagement with clearing members, and explicit exclusion of initial margin haircutting from recovery and resolution tools.

The associations support the introduction of statutory bail-in powers, but stress respect for creditor hierarchy, netting and set-off protections, and recommend the introduction of a no-creditor-worse-off safeguard. They also call for clearer triggers, caps on loss allocation tools and further guidance on entry into resolution and compensation.