The International Swaps and Derivatives Association (ISDA) used opening remarks at its Derivatives Trading Forum in Sydney to outline work aimed at improving consistency and efficiency in derivatives margining, collateral mobilisation and trade close-out. The update centred on the shift to a semiannual recalibration cycle for the ISDA Standard Initial Margin Model (ISDA SIMM), efforts to support tokenized collateral within clear legal and regulatory parameters, and adoption of the ISDA Notices Hub for delivering termination-related notices. On margin, ISDA noted it has published the first SIMM recalibration under the new semiannual cycle and continues to share calibration, backtesting and monitoring with 22 global authorities. The remarks also flagged implications for Australia’s superannuation sector as derivatives use and foreign exchange hedging grow, citing Reserve Bank of Australia analysis that the total superannuation FX hedge book is around AUD 500 billion and could more than double over the next decade, while only two Australian superannuation funds have been approved to use ISDA SIMM so far. On collateral, ISDA cited its margin survey showing initial margin and variation margin collected for non-cleared exposures rose 6.4% to USD 1.5 trillion at end-2024, and pointed to liquidity strains from variation margin spikes, including uncertainty about superannuation funds’ ability to access repo markets for liquidity management under the SIS Act. It also highlighted a shift away from cash as variation margin (from 80% in 2020 to 68% in 2024) and described tokenization as a potential way to mobilise assets such as money market funds more efficiently. On close-out, ISDA referenced the July launch of the Notices Hub and said more than 140 buy- and sell-side entities have adhered to the ISDA 2025 Notices Hub Protocol, alongside ongoing expansion of ISDA’s Digital Regulatory Reporting (DRR) offering. ISDA said its tokenization programme will focus on achieving clear and consistent legal and regulatory frameworks, including documentation and regulatory certainty on the eligibility of tokenized assets as collateral under margin rules, and on interoperability through common data models, smart contract standards and messaging protocols, leveraging the Common Domain Model.
ISDA 2025-10-20
International Swaps and Derivatives Association highlights ISDA SIMM semiannual recalibration and tokenization work and reports over 140 adherents to the Notices Hub Protocol
The International Swaps and Derivatives Association (ISDA) outlined initiatives at its Derivatives Trading Forum in Sydney to enhance derivatives margining, collateral mobilisation, and trade close-out, including a shift to a semiannual recalibration cycle for the ISDA Standard Initial Margin Model (ISDA SIMM) and support for tokenized collateral. ISDA also highlighted the rise in initial and variation margin for non-cleared exposures to USD 1.5 trillion by end-2024, liquidity challenges for superannuation funds, and the adoption of the ISDA Notices Hub for termination notices.