ISDA has published a briefing paper that addresses the argument put forward by EU authorities that clearing at third-country tier-two central counterparties (CCPs) carries a financial stability risk, as well as risks to monetary policy implementation. In the paper, ISDA highlights that the tier-two designation depends largely on the CCP’s size, which does not translate to increased risk if the CCPs are subject to appropriate risk management and supervision. Furthermore, ISDA notes that European Market Infrastructure Regulation 2.2 ensured that tier-two CCPs from the UK are held to the exact same standards as EU CCPs and are directly supervised by the European Securities and Markets Authority, in addition to being supervised by the Bank of England, which affords EU authorities robust safeguards in a recovery scenario. This highlights that clearing at UK CCPs is not riskier than clearing at EU CCPs. Finally, the paper also covers concerns in relation to risks to monetary policy implementation and crisis scenario concerns.
Documents (1) for ISDA Briefing Paper on Clearing at UK Tier-two CCPs
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...