The International Swaps and Derivatives Association (ISDA) published a derivatiViews commentary by Chief Executive Officer Scott O’Malia backing the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) roundtable on regulatory harmonization and calling for a more streamlined, coordinated US derivatives rulemaking process. The piece argues that overlapping and inconsistent CFTC and SEC requirements and reliance on no-action relief create unnecessary complexity, and identifies three areas where alignment would improve compliance and reduce costs. On regulatory reporting, ISDA points to the Archegos collapse, which left counterparty banks with more than USD 10 billion in losses, and notes that differences in the timing of CFTC and SEC reporting regimes contributed to data gaps. With both regimes now in place and the SEC having allowed firms to use CFTC reporting processes on a temporary basis, ISDA urges the SEC to work with the CFTC and industry to codify this relief into permanent SEC rules, and says it plans to add the SEC rules to its Digital Regulatory Reporting initiative. On Treasury clearing, ahead of a clearing mandate coming into force from end-2026, ISDA says clients need portfolio margining across cleared US Treasury securities and futures and calls on the CFTC and SEC to approve a client portfolio margining solution once proposed by the Fixed Income Clearing Corporation and CME Group; it also calls for US prudential regulators to recognize netting benefits across products under the standardized approach to counterparty credit risk. On market liquidity and collateral infrastructure, ISDA cites its margin survey showing initial and variation margin for non-cleared derivatives rose 6.4% to USD 1.5 trillion at end-2024, and argues tokenization and 24/7 risk management could expand usable collateral and support more automated collateral workflows through blockchain and tokenized solutions.
ISDA 2025-10-02
International Swaps and Derivatives Association urges greater CFTC-SEC harmonization on derivatives reporting, Treasury clearing and collateral infrastructure
ISDA supports the CFTC and SEC roundtable on regulatory harmonization, advocating for streamlined US derivatives rulemaking to reduce complexity and costs. ISDA highlights the need for permanent SEC rules aligning with CFTC processes, portfolio margining for US Treasury securities, and enhanced collateral infrastructure through tokenization and blockchain.