CCP Rule Book Changes on Settled-to-Market Model/Impact on Hedge Acctg

On January 4, 2017, ISDA’s Accounting Committee issued a confirmation letter to the Staff of Office of the Chief Accountant of the Securities and Exchange Commission (SEC) related to an ISDA whitepaper on the accounting Impact of central counterparty rule book changes. The SEC staff confirmed all the conclusions of the ISDA Accounting Committee outlined in the whitepaper and follow-up submission – namely i) that the changes to the rule books of LCH and CME, as supported by legal opinions from external counsel, should result in the presentation of variation margin amounts as settlement of the derivative exposure and not collateral against it for purposes of applying the accounting and presentation guidance in ASC 815 (US GAAP covering derivatives and hedging); and ii) that the de-designation and re-designation of existing hedging relationships under ASC 815 would not be required solely because of these changes to the respective CME and LCH rule books. ISDA recognizes the significance of the continued application of hedge accounting when the hedging derivative has been affected by these rule changes and its importance to clearing members and end users.

Response to FCA on UK MIFIR Consultation

On February 20, ISDA responded to the Financial Conduct Authority’s (FCA) consultation on improving the UK Markets in Financial Instruments Regulation (MIFIR) transaction reporting regime. The consultation aims to reduce the regulatory burden on firms, support sustained economic growth in...

Episode 55: Tokenization in Derivatives Markets

Tokenization has the potential to bring much-needed efficiency and flexibility to collateral management. Sandy Kaul from Franklin Templeton and the DTCC’s Joseph Spiro talk about the opportunities and the path to broader adoption. Please view this page via Chrome to...