On July 20, ISDA responded to a consultation paper from the Clearing Corporation of India Ltd (CCIL) on a proposal to introduce stress loss margin (SLM).
ISDA members are supportive of the introduction of SLM for the derivatives segment as it collects higher margins from members, driving stress losses beyond a certain limit, and reduces loss mutualization among members by limiting their default fund requirements, moving towards a defaulter pay model. This is a positive development aligning CCIL’s risk management practices with that of global CCPs such as LCH and Eurex.
ISDA also highlights some suggestions to help members adapt to the SLM requirements, addressing procyclicality of SLM to ensure adequacy of the default fund, as well as introducing SLM in the non-derivatives segment. Comments also included a clarification on the impact of threshold parameters and a request to accept government bond securities as one of the resources accepted to settle SLM.
Documents (1) for ISDA Responds to CCIL Consultation on Stress Loss Margin
Latest
Response to FASB on KPIs for Business Entities
On April 30, ISDA submitted a response to the Financial Accounting Standards Board’s (FASB) proposal on financial key performance indicators (KPIs) for business entities. In the response, ISDA addressed the implications of KPI standardization, its potential impact on financial reporting...
Updated OTC Derivatives Compliance Calendar
ISDA has updated its global calendar of compliance deadlines and regulatory dates for the over-the-counter (OTC) derivatives space.
Response on Commodity Derivatives Markets
On April 22, ISDA and FIA submitted a joint response to the European Commission’s (EC) consultation on the functioning of commodity derivatives markets and certain aspects relating to spot energy markets. In addition to questions on position management, reporting and...
Episode 50: The Value of Derivatives
A new report from ISDA shows that companies all over the world use derivatives to alleviate uncertainty, transfer risk and enhance profitability. ISDA discusses the findings with Boston Consulting Group’s Roy Choudhury. Please view this page via Chrome to access...