ISDA and the Association for Financial Markets in Europe (AFME) have responded to the European Commission’s (EC) consultation on the draft legal text of the upcoming market risk delegated act.
The associations welcome the ongoing efforts to address the implementation of the market risk standard and the commitment to ensure a level playing field and consistency in the content of the rules.
In the EU, the delegated act process has been the main tool to address implementation issues with the Fundamental Review of the Trading Book (FRTB) and ISDA welcomes the dual approach to introduce temporary and targeted changes and the use of a multiplier for market risk capital requirements for firms negatively impacted by FRTB implementation.
However, there are elements that need to be further clarified ahead of implementation, including the boundary and the output floor treatment, which are included in the response.
Documents (1) for ISDA, AFME Respond to EC on Market Risk Delegated Act
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