ISDA Responds to EC on CSDDD Due Diligence Guidelines

On August 6, ISDA responded to the European Commission’s (EC) consultation on due diligence guidelines under the Corporate Sustainability Due Diligence Directive (CSDDD). While ISDA acknowledges that model contractual clauses can be a helpful resource for in-scope companies, there are limits on what a model clause can achieve in the context of ensuring effective due diligence. Any model clause should provide a framework to support in-scope companies in collaborating with business partners on effective due diligence, rather than seeking to impose a contractual version of the due diligence obligations under CSDDD on firms that are not otherwise within scope. A model clause should offer drafting options for firms but should not be presented as a blueprint that must be followed to achieve compliance, as the range of in-scope relationships, relative negotiating power and criticality of the relationship to either party will vary significantly so that a one-size-fits-all model clause is unlikely to be suitable for any relationship.

The response sets out detailed comments on the EC’s proposed approach and flags the risks that may arise if model clauses seek to duplicate the CSDDD due diligence obligations, including potentially closing off access to certain suppliers for in-scope companies.

Documents (1) for ISDA Responds to EC on CSDDD Due Diligence Guidelines

Expanding the Universe of Eligible VM

ISDA conducted a series of interviews with buy- and sell-side firms to understand the drivers of a growing use of non-cash assets as variation margin (VM) for non-cleared over-the-counter (OTC) derivatives and the barriers that remain to expanding the use...

ISDA Response on Hedge Accounting Guidance

On August 14, ISDA responded to an exposure draft from the Financial Accounting Standards Board (FASB). ISDA broadly supports the FASB’s proposed targeted improvements to hedge accounting, including allowing interest rate hedging of held-to-maturity (HTM) debt securities, recognizing all Secured...

Joint Response to EBA Consultation

On August 12, ISDA and the Association for Financial Markets in Europe (AFME) responded to the European Banking Authority’s discussion paper on certain taxonomy key performance indicators (KPIs) and other aspects of the Disclosures Delegated Act  under Article 8 of...

Response to JSCC on Clearing Fund Consolidation

On August 12, ISDA responded to the Japan Securities Clearing Corporation’s (JSCC) consultation on its proposal to consolidate clearing fund consumption, calculation and deposit segmentation across six clearing qualifications under the Financial Instruments and Exchange Act. ISDA members broadly support...