On July 27, ISDA submitted a letter to the U.S. Commodity Futures Trading Commission (CFTC) on the CFTC’s proposed rulemaking on public interest determinations for event contracts published in the Federal Register on June 12, 2026. ISDA emphasized the importance of market integrity as the markets expand to consider new products, legal and regulatory certainty regarding the scope of event contracts that are swaps and/or security-based swaps and ensuring that the regulatory treatment of new products is guided by the particular risks they present. ISDA assessed the need for appropriately calibrated margin methodologies and capital charges for these products, as well as separate guaranty funds and loss-allocation waterfalls for CCPs and the appropriateness of auto-liquidation and clearing models for event contracts offered on a margined basis.
The letter focused on the following areas:
- Market Integrity Considerations;
- Margin Model Calibration and Capital Requirements;
- Separate Financial Resources and Default Waterfalls for CCPs;
- Considerations for 24/7 Trading, and Auto-Liquidation; and
- Self-Certification Process Considerations.
Documents (1) for ISDA Letter to CFTC on Public Interest Determinations for Event Contracts
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