
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
Driving IT resilience through managed services
How Murex is supporting financial institutions with managed services and providing strategic solutions
US Basel equivalence questioned as EU patience wears thin
MEPs say unfaithful US implementation of Basel III could trigger review of access to EU markets
The Term €STR transition: challenges and market readiness
The progress, challenges and factors shaping the adoption of Term €STR as financial institutions transition from Euribor
CFTC takes red pen to swaps rules, but don’t call it a rollback
Lawyers and ex-regs say agency is fine-tuning and clarifying regulations, not eliminating them
EU edges closer to calming FRTB fund-linked fray
Dealers say temporary solution is a step in the right direction but won’t fully resolve all issues
European Commission changes tune on proposed FRTB multiplier
Banks fear departure from original diversification factor undermines case for permanent relief
Supervisors should be mindful of geopolitical risks, says IMF
Shock events cause sizeable swings in asset pricing, institution’s latest report highlights
Bowman won’t commit to stress-testing the tariff shock
Nominated Fed vice-chair stonewalls calls to run ad hoc scenario similar to 2020 Covid test