ISDA supports financial regulatory reform, in the interest of ensuring market stability and reducing systemic risk. ISDA also supports proposals that will require the use of, and reporting to, trade repositories for OTC derivatives.
Following publication of the European Commission (EC)'s consultation papers on the regulation of the over-the-counter (OTC) derivatives markets, the International Swaps and Derivatives Association, Inc. (ISDA) made the following statement:
“ISDA and the OTC derivatives industry welcome the European Commission's efforts and look forward to giving our views on the consultation paper. We and our members support financial regulatory reform in the interest of ensuring market stability and reducing systemic risk. Our extensive, on-going work focuses on three key areas – improving transparency, strengthening counterparty risk management through the use of clearinghouses, and building a robust operational infrastructure – and underscores our commitment to making derivatives safer.
Today, regulators have complete transparency over Credit Default Swap (CDS) and Interest Rate Swap (IRS) market positions, through the trade repositories that are in place for those asset classes. The industry’s goal is to provide supervisors with a complete view of the OTC derivatives market, both cleared and uncleared trades, across transactions, firms, and counterparties. The Association supports proposals that will require the use of, and reporting to, trade repositories for OTC derivatives.
To strengthen counterparty risk management infrastructure, the industry is committed to delivering robust, efficient and accessible central clearing to the OTC derivatives markets. Significant steps have been undertaken by industry participants to increase the range of products eligible for clearing and deliver a high level of standardisation across all asset classes to increase the netting and clearing potential for all appropriate products. We strongly support the principles that clearing houses should be robust and that some derivatives are simply not eligible for clearing.”
© ISDA - International Swaps and Derivatives Association
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