Basel Committee consults on proposed definitions of non-performing exposures and forbearance. The Basel Committee on Banking Supervision launched a consultation on proposed definitions of non-performing exposures and forbearance in an effort to harmonize the categorization of problem assets by banks. The proposed definition of non-performing exposures would introduce criteria for categorizing loans and debt securities that are focused on delinquency status or the unlikeliness of repayment. The proposed definition of forbearance would establish criteria for when a forborne exposure no longer meets the definition and emphasizes the need to ensure a borrower’s soundness before the discontinuation. Comments are due on or before July 15, 2016. (4/14/2016) BIS press release.
ISDA publishes guidance document on variation margin requirements for non-cleared derivatives. The International Swaps and Derivatives Association released a document to help market participants comply with variation margin obligations for non-cleared derivatives under the Basel Committee’s margining framework for non-cleared derivatives, which will become effective on March 1, 2017. The 2016 Credit Support Annex for Variation Margin is for use with New York law and is the first in a series of documents ISDA will publish to assist market participants in various jurisdictions in complying with the rules. (4/14/2016) ISDA press release.
ISDA elects ten board members. ISDA announced the election of three new directors and the re-election of seven directors at its Annual General Meeting in Tokyo. (4/14/2016) ISDA press release.
ISDA paper advocates entity-based approach to derivatives trade reporting.ISDA and 12 other trade associations jointly published a paper that recommends the global adoption of an entity-based reporting framework for derivatives trades to improve data quality, promote consistency in reporting standards, reduce operational complexity, cut costs, and eliminate the reporting burden on end users. (4/13/2016) ISDA press release.
ISDA publishes revised version of EMIR classification letter. ISDA released a revised classification letter that counterparties may use to comply with regulatory requirement under EMIR, including the obligation to notify other counterparties of their status for clearing. (4/13/2016) ISDA press release.
ISDA releases information statement on SFTR. ISDA and four other industry associations published an information statement outlining the general risks and consequences involved in entering a title transfer arrangement or granting a right to reuse collateral under a security arrangement, which market participants can use to comply with disclosure requirements under the European Union’s Securities Financing Transactions Regulation. (4/13/2016) ISDA press release.
Basel Committee reviews progress of adoption of Basel II standards. The Basel Committee released the Tenth progress report on adoption of the Basel regulatory framework, which reviews the adoption status of the Basel II standards in member jurisdictions as of the end of March 2016. The report found that all member jurisdictions have implemented final risk-based capital rules, LCR regulations, and capital conservation buffers and most have implemented final rules for the countercyclical capital buffer and draft or final rules for their domestic systemically important banks framework. (4/11/2016) BIS press release.
IOSCO report studies cybersecurity risks in the securities markets. The International Organization of Securities Commissions published a report on the different regulatory approaches related to cybersecurity and the tools available to regulators to respond to these risks in the securities markets. (4/6/2016) IOSCO press release.
Basel Committee proposes revisions to Basel III leverage ratio framework and issues new FAQs. The Basel Committee requested comments on proposed revisions to the Basel III leverage ratio framework that would, among other things, use a modified version of the standardized approach for measuring counterparty credit risk exposures, clarify the treatment of provisions and prudential valuation adjustments for less liquid positions, and align the credit conversion factors for off-balance sheet items with those proposed for the standardized approach to credit risk. Comments are due on or before July 6, 2016. The Basel Committee also published a third set of frequently asked questions and answers on the Basel III leverage ratio framework. (4/6/2016) BIS press release.