On March 31, 2021, ISDA and the Institute of International Finance (IIF) submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on technical amendments to minimum haircuts for securities financing transactions (SFTs).
The BCBS published for consultation two technical amendments to the section of the framework that deals with the calculation of minimum haircut floors for SFTs. The technical amendments clarify an interpretation issue relating to collateral upgrade transactions and fix a misstatement of the formula used to calculate haircut floors for netting sets of SFTs.
In the response, the associations took the opportunity to respond to broad aspects of the framework. The response is structured in two components. First, it focuses on the scope of application of the minimum haircut requirement and, in particular, the potential negative impact for securities borrowing transactions. The second component focuses on the quantitative determination of minimum haircut requirements and issues relating to the penalty function embedded in the proposed framework that creates cliff-effect outcomes and introduces instability in the calculation.
Documents (1) for ISDA and IIF Respond to Basel Committee Consultation on SFT Haircuts
Latest
ISDA Comments on EP's MISP Draft Reports
On July 15, ISDA shared comments with policymakers in the European Union on the European Parliament’s (EP) draft reports by Member of the European Parliament (MEP) Markus Ferber and MEP Eero Heinäluoma on the Market Integration and Supervision Package (MISP)....
Building Markets, Creating Opportunity
Deep and liquid derivatives markets are fundamental to the development of well-functioning financial markets and healthy economies. They support lending, investment and financial stability, creating the certainty needed for economic growth. But strong derivatives markets do not emerge by chance....
Key Trends in OTC Derivatives Market H2 2025
The latest data from the Bank for International Settlements over-the-counter (OTC) derivatives statistics shows an increase in notional outstanding of OTC derivatives during the second half of 2025 compared to the same period in 2024. Notional outstanding rose across all...
ISDA-SIFMA letter to SEC on Swap Dealer Thresholds
ISDA and SIFMA have submitted a comment letter to the SEC in response to the staff report on the definitions of “security-based swap dealer” and “major security-based swap participant.” The associations recommend maintaining the current de minimis thresholds for both...