Basel Committee releases revised securitization framework with capital treatment for STC securitizations. The Basel Committee on Banking Supervision published a revised standard for the regulatory treatment of securitization exposures that establishes additional criteria for differentiating the capital treatment of “simple, transparent and comparable” securitizations from that of other securitization transactions. Among other things, the additional criteria exclude transactions in which standardized risk weights for the underlying assets exceed specified levels in an effort to prevent higher-risk underlying exposures from qualifying for the same capital treatment as STC-compliant transactions. (7/11/2016) BIS press release.
ISDA, along with GFMA, IIF, JFMC and TCH, respond to Basel consultation on leverage ratio. The International Swaps and Derivatives Association, along with the Global Financial Markets Association, the Institute of International Finance, the Japan Financial Markets Council and The Clearing House, responded to the Basel Committee on Banking Supervision’s consultation on Revisions to the Basel III leverage ratio framework (Proposed Framework). (7/7/2016)
ISDA sends joint letter responding to CFTC’s proposed rule on Regulation AT.ISDA, along with the FIA, FIA Principal Traders Group, Managed Funds Association, and SIFMA’s Asset Management Group, sent a joint letter to the CFTC in response to the reopened comment period on their proposed rule on Regulation Automated Trading. The associations highlighted industry accord on the importance of risk controls and principles-based rulemaking. The letter advised the CFTC to separate the rulemaking into phases and to first address pre-trade risk controls, which have been confirmed to be the most effective protection for markets. (6/28/2016) ISDA press release.
CPMI and IOSCO publish third update to Level 1 assessments of implementation monitoring of the PFMI. The International Organization of Securities Commissions and the Committee on Payments and Market Infrastructures released the third update to the Level 1 assessments of implementation monitoring of the Principles for financial market infrastructures. The update, which reflects the status of jurisdictions’ legal, regulatory or policy frameworks as of January 8, 2016, shows that 19 out of 28 jurisdictions have completed their implementation measures for all financial market infrastructure types. (6/28/2016) IOSCO press release.
CPMI-IOSCO release cyber security guidance for financial industry. IOSCO and CPMI published final guidance on cyber resilience for financial market infrastructures. The guidance provides authorities with a set of internationally agreed guidelines to support consistent and effective oversight and supervision of financial market infrastructures in the area of cyber risk. (6/29/2016) IOSCO press release.
ISDA response to UK referendum vote. In statement responding to the UK referendum vote to leave the EU, ISDA indicated that it will establish applicable working groups and hold a series of industry calls to address potential issues for derivatives market participants as a result of the vote. (6/24/2016) ISDA statement.
ISDA raises concerns about Basel Committee’s proposals on internal risk models. Responding to the Basel Committee on Banking Supervision’s consultation on Reducing variation in credit risk-weighted assets — constraints on the use of internal model approaches, ISDA, along with the GFMA, the JFMC, and the International Association of Credit Portfolio Managers, maintained that the absence of risk sensitivity from the proposal would distort capital allocation decisions and pricing in a way that would hurt banks’ customers and the global economy. (6/22/2016) ISDA press release.
FSB consults on policy recommendations to address structural vulnerabilities from asset management activities. The Financial Stability Board requested comments on 14 proposed policy recommendations to address structural vulnerabilities from asset management activities that could potentially present financial stability risk, including issues associated with liquidity mismatch and leverage within investment funds. Comments are due on or before September 21, 2016. (6/22/2016) FSB press release.
IOSCO issues statement of priorities regarding data gaps in the asset management industry. IOSCO released a public statement that identifies its key priorities and provides a series of recommendations to address data gaps in the asset management industry. Among other things, IOSCO will encourage its members to collect data with a view to better identify systemic risk. (6/22/2016)IOSCO press release.