ISDA Responds to RBI Consultation on SA-CCR

On July 1, ISDA responded to the Reserve Bank of India’s (RBI) consultation on draft amendment directions on the standardized approach for counterparty credit risk (SA-CCR).

ISDA broadly welcomes the RBI’s move to SA-CCR and updated capital treatment for exposures to central counterparties (CCPs), noting the draft directions closely track standards from the Basel Committee on Banking Supervision (BCBS). The response raises five areas for clarification or alignment: (i) the requirement for prior RBI approval of non-zero λj values, which ISDA suggests replacing with a supervisory guidance approach consistent with BCBS frequently asked questions and Hong Kong Monetary Authority practice; (ii) whether the 1.4 alpha factor, designed for internal model method risks, is appropriate under a standardized approach; (iii) support for the draft’s explicit treatment of multi-level client structures; (iv) a requirement for an independent legal opinion to apply a 0% risk weight on qualifying CCP trade exposures, which goes beyond the BCBS standard and could instead be satisfied through internal documented analysis; and (v) the criterion requiring a porting precedent to assess portability as “highly likely”, which should not penalize CCPs that never had a clearing member default.

ISDA also highlights its ongoing global advocacy for SA-CCR to recognize cross-product netting between derivatives and securities financing transactions, referencing the recent response to the US Basel III re-proposal.

Documents (1) for ISDA Responds to RBI Consultation on SA-CCR

Expanding the Universe of Eligible VM

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ISDA Response on Hedge Accounting Guidance

On August 14, ISDA responded to an exposure draft from the Financial Accounting Standards Board (FASB). ISDA broadly supports the FASB’s proposed targeted improvements to hedge accounting, including allowing interest rate hedging of held-to-maturity (HTM) debt securities, recognizing all Secured...

Joint Response to EBA Consultation

On August 12, ISDA and the Association for Financial Markets in Europe (AFME) responded to the European Banking Authority’s discussion paper on certain taxonomy key performance indicators (KPIs) and other aspects of the Disclosures Delegated Act  under Article 8 of...

Response to JSCC on Clearing Fund Consolidation

On August 12, ISDA responded to the Japan Securities Clearing Corporation’s (JSCC) consultation on its proposal to consolidate clearing fund consumption, calculation and deposit segmentation across six clearing qualifications under the Financial Instruments and Exchange Act. ISDA members broadly support...