Featured Product

    ISDA Publishes First Issue of ISDA Quarterly in 2020

    January 30, 2020

    The ISDA Quarterly or IQ, which examines the issues driving the adoption of technology and explores initiatives to establish standards that will help facilitate full-scale automation across industry, has been published. This year has several urgent to-do items and unmissable deadlines, with the next 12 months being crucial for benchmark reform, Brexit, and the roll out of initial margin requirements. Another key area with ongoing developments is the implementation of the final Basel III reforms as standards on market risk, counterparty credit risk, and credit valuation adjustment are expected to be transposed and implemented in many Basel jurisdictions.

    ISDA is also working to ensure legal standards keep pace with the 21st century. This includes the development of a taxonomy and clause library related to the ISDA Master Agreement, along with a project that will increase standardization and make it easier to capture key legal data and share that information consistently across the institution. In ISDA Create, ISDA and Linklaters have developed a tool that will allow that documentation to be negotiated and executed online. The platform is up and running for initial margin while other documents will be added over time. ISDA Create is a new platform that allows firms to produce, deliver, and negotiate derivatives documentation completely online. The system captures, processes, and stores data from these documents, providing users with a complete digital record.

    This year, ISDA will publish amendments to the 2006 ISDA Definitions that will incorporate fallbacks into new derivatives referencing certain interbank offered rates (IBORs). A protocol will also be launched to enable firms to embed the new fallbacks into legacy trades as well. Both will take effect approximately three months after publication, significantly reducing the systemic risk posed by continued exposure to LIBOR and other key IBORs. From a derivatives perspective, reaching long-term equivalence and recognition of central counterparties and trading venues during this period will be vital to avoid potential market disruption after the transition. This is also a crucial time for the rollout of the initial margin requirements, with thousands of new counterparty relationships coming into scope of the rules from September. Last year saw an extension of the phase-in schedule for the smallest firms until 2021, which will help reduce a potential compliance bottleneck—but the September 2020 phase-in is still expected to pose a huge challenge for the industry. 

    IQ presents a bird's eye view  of the outstanding issues related to the implementation of Basel III standards. It is believed that the next phase of Basel III looks set to be more challenging, as regulators, legislators, and market participants grapple with more technical, granular changes to the capital framework. In some cases, such as credit valuation adjustment, or CVA, capital requirements, the Basel Committee has recognized the need to consult on targeted revisions. In other cases, concerns will need to be addressed at the national level when the standards are transposed into law.


    Related Links

    Keywords: International, Banking, Insurance, Securities, ISDA Quarterly, Benchmark Reforms, Brexit, ISDA Create, Common Domain Model, OTC Derivatives, Fintech, Basel III, FRTB, CVA, SA-CCR, ISDA

    Featured Experts
    Related Articles

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699