On January 10, 2022, ISDA published a whitepaper, Capitalization of Equity Investment in Funds Under the FRTB Framework.
Funds perform a key role in the economy, and banks play an important part in facilitating indirect investments in funds for their clients, offering structured investment and hedging solutions and providing an effective and liquid market. However, the treatment of equity investments in funds (EIIFs) under the Fundamental Review of the Trading Book is very conservative and may unduly increase the cost of providing fund investment solutions.
This paper outlines the various regulatory prescribed methodologies and the operational challenges faced by banks in implementing them. The paper also explores vendor solutions and proposes alternative methods for calculating capital requirements for EIIFs.
Documents (1) for Capitalization of Equity Investments in Funds Under the FRTB
Latest
Steps to a Vibrant Derivatives Market: SOM Remarks
Steps to a Vibrant and Resilient Derivatives Market December 4, 2025 Remarks at the Mediterranean Partnership of Securities Regulators Scott O’Malia ISDA Chief Executive Officer Good afternoon and thank you to the Mediterranean Partnership of Securities Regulators (MPSR) for...
ISDA Response to BoE on Gilt Market Resilience
On November 28, ISDA responded to the Bank of England’s discussion paper on gilt market resilience. ISDA encourages the Bank of England, before introducing any significant policy changes that would affect the functioning of the gilt repo market, to consider...
Addressing Termination Troubles
When Enron announced a shock $618 million loss on October 16, 2001, it took a further 47 days until it filed for bankruptcy. For Bear Stearns, it took 266 days between its bailout of a structured credit fund run by...
ISDA In Review – November 2025
A compendium of links to new documents, research papers, press releases and comment letters published by ISDA in November 2025.