ISDA response to the FASB exposure draft on the effect of derivative contract novations

On October 5, ISDA’s Accounting Committee responded to a consultation issued by the Financial Accounting Standards Board (FASB) seeking views from all stakeholders on the effect of derivative contract novations on existing hedge-accounting relationships. ISDA welcomes the proposal on the novation of derivatives and hedge accounting. We agree with the exposure draft’s conclusion that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument in a hedging relationship under Topic 815, should not, in and of itself, require the de-designation of the relationship, provided that all other hedge-accounting criteria continue to be met. The ability to continue a hedge-accounting relationship under Topic 815 upon novation of a designated derivatives contract would help eliminate diversity in practice, simplify the application of hedge accounting, and provide more decision-useful information to users of financial statements.

Documents (1) for ISDA response to the FASB exposure draft on the effect of derivative contract novations

Paper on Proposal 6 on Margin Transparency

On November 16, ISDA published a document that looked at proposal 6 in the final Basel Committee on Banking Supervision (BCBS), Committee on Payments and Market Infrastructures (CPMI) and International Organization of Securities Commissions (IOSCO) report on margin transparency. Proposal...

Tender Issued for DC Administrator Role

ISDA and the Credit Derivatives Governance Committee have issued an invitation to tender for an independent regulated entity to serve as the administrator for the Credit Derivatives Determinations Committees (DCs), which includes assuming the role of DC secretary. The DC...

ISDA SIMM: The Standard for IM Calculations

The ISDA Standard Initial Margin Model (ISDA SIMM) plays an important role in ensuring margin calculations are consistent, transparent and aligned with global best practices and regulatory requirements. Since its launch in 2016, the model has been rigorously tested, regularly...