Isda presses Congress for passage of netting provisions
The International Swaps and Derivatives Association, the trade association for the financial risk management industry, has teamed with other key trade bodies in pressing the United States Congress to secure favourable passage of legislation on financial contract netting before it adjourns this year.
The provisions include improvement to payment risk reductions and netting provisions of the Bankruptcy Code and US bank insolvency laws. In a joint letter to Congress, Isda asserted the legal uncertainty created by the Bankruptcy Code’s treatment of financial contracts has resulted in US companies receiving less favourable credit treatment from their trading counterparties that are not subject to the US insolvency laws.
These uncertainties have been a major impediment to the adoption of cross-product netting documentation developed by the derivatives industry. Removing these uncertainties will make it easier for providers of credit to ascertain their risks, thereby assisting in providing credit to American businesses, the letter stated.
"The time to act on these provisions is now," said Robert Pickel, Isda's chief executive, in a statement. "The risk reduction benefits of the netting provisions are enormous, and we hope Congress will act to eliminate the legal uncertainty created by the Bankruptcy Code's treatment of financial contracts."
Other signatories to the letter include: American Bankers Association, ABA Securities Association, The Bond Market Association, Emerging Markets Traders Association, The Foreign Exchange Committee, Futures Industry Association, The Financial Services Roundtable, Investment Company Institute, Managed Funds Association, The New York Clearing House Association, The Options Clearing Corporation and the Securities Industry Association.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
FCMs warn of regulatory gaps in crypto clearing
CFTC request for comment uncovers concerns over customer protection and unchecked advertising
UK clearing houses face tougher capital regime than EU peers
Ice resists BoE plan to move second skin in the game higher up capital stack, but members approve
ECB seeks capital clarity on Spire repacks
Dealers split between counterparty credit risk and market risk frameworks for repack RWAs
FSB chief defends global non-bank regulation drive
Schindler slams ‘misconception’ that regulators intend to impose standardised bank-like rules
Fed fractures post-SVB consensus on emergency liquidity
New supervisory principles support FHLB funding over discount window preparedness
Why UPIs could spell goodbye for OTC-Isins
Critics warn UK will miss opportunity to simplify transaction reporting if it spurns UPI
EC’s closing auction plan faces cool reception from markets
Participants say proposal for multiple EU equity closing auctions would split price formation
Fed pivots to material risk – but what is it, exactly?
Top US bank regulator will prioritise risks that matter most, but they could prove hard to pinpoint