We’re coming to the end of an exceptionally busy year at ISDA, in which we celebrated our 40^th anniversary and doubled down on our enduring commitment to safe and efficient derivatives markets. Reflecting on ISDA’s achievements since 1985, it’s clear that while the market is constantly evolving, there is no challenge that can’t be overcome or opportunity that can’t be realized if we employ the right balance of ambition, commitment and collaboration. In 2026 and beyond, we’ll be taking that same approach as we focus on the modernization of the derivatives market.

Driven by the rapid development of advanced technologies, as well as economic shifts and geopolitical risk, the pace of change in derivatives markets is accelerating rapidly. We need to make sure the market continues to meet the needs of its users and the real economy, which will require key industry processes and regulations to be brought into the modern age. That will be our priority as we move beyond our 40^th anniversary, and it runs across several key areas.

First, the completion of Basel III. As I wrote recently, the preservation of deep and liquid markets depends on our continued commitment to risk-appropriate capital requirements. We expect US regulators to publish a revised version of the Basel III endgame package early next year, and we’ll work closely with our members to analyze the proposals and test their impact. We’re also developing a response to the European Commission’s consultation on targeted changes to the Fundamental Review of the Trading Book, which closes on January 6. We must maintain focus to ensure we achieve a robust, modern capital framework that is fit for purpose.

Second, we’re now in a crunch phase for US Treasury clearing, as the first mandate is due to take effect for cash transactions at the end of next year. This is going to be a major change, and we’ve repeatedly argued that clients must be able to realize the benefits of portfolio margining across cleared US Treasury securities and futures. Central counterparties have developed a client portfolio margining solution, and we welcome the proposal earlier this month from the Commodity Futures Trading Commission to approve this client service. US prudential regulators also need to amend their rules to recognize the risk-reducing benefits of netting across products, including cleared repos and futures, under the standardized approach for counterparty credit risk. This is essential to ensure banks have the capacity to clear on behalf of their clients, so we’ll continue to advocate on this point.

Our third modernization priority is data reporting. Despite efforts to improve the accuracy and consistency of reporting, we’re still struggling with a fragmented and costly framework that hasn’t delivered the level of transparency that was intended. With a constructive consultation from the European Securities and Markets Authority now complete and another consultation underway from the UK Financial Conduct Authority, we have an opportunity to begin to fix the flaws in pursuit of a modern, effective global reporting framework. We’ll be keeping our eye firmly on that prize as we engage with policymakers and continue to evolve ISDA’s Digital Regulatory Reporting initiative, which enables market participants to implement reporting rules more accurately and consistently than ever before.

And, finally, we believe there is a valuable opportunity to use tokenization to modernize collateral management and alleviate some of the liquidity and workflow challenges that have been laid bare during recent episodes of market stress. Specifically, tokenization could enable market participants to expand the types of collateral used for variation margin to a wider pool of assets, including money market funds. We’re now working to clarify the legal and regulatory framework, and we’re collaborating with market participants to establish interoperability, supported by common data standards.

At the end of a year in which we have celebrated and reflected on ISDA’s remarkable journey, our book of work is as full as ever. We’re grateful to all the market participants and policymakers – both past and present – who have helped us to mark this special milestone around the world, and we’re advancing into 2026 with renewed energy and focus on the goal of modernizing markets.