The International Swaps and Derivatives Association (ISDA) published opening remarks by chief executive Scott O’Malia setting out its current priorities on three fronts: industry readiness for mandatory clearing in the US Treasury market, completion and alignment of Basel III capital reforms, and adoption of the ISDA Notices Hub for delivering termination-related notices. On US Treasury clearing, ISDA highlighted that the first clearing mandate for certain cash Treasury transactions is due to begin at end-2026, with repos following in mid-2027, and pointed to the emergence of different clearing models across the Fixed Income Clearing Corporation, CME and Intercontinental Exchange. Documentation for done-with transactions is complete, work is continuing on done-away documentation, and dealers will need to execute documents with thousands of counterparties and obtain netting opinions across the US and other jurisdictions. ISDA also identified three capital framework issues it wants addressed to support client clearing capacity: finalization and implementation of proposed changes to the enhanced supplementary leverage ratio by start-2026; revisions to the Basel III endgame and global systemically important bank surcharge to avoid an increase of more than 80% in capital for global systemically important bank client clearing businesses; and adjustments to the standardized approach for counterparty credit risk to recognize cross-product netting, particularly as portfolio margining programs for clients develop across cleared Treasury repos and futures. On Basel III more broadly, the remarks pointed to cross-jurisdiction divergence in the Fundamental Review of the Trading Book, noting the European Union’s delay to start-2027 and that the UK’s Prudential Regulation Authority has consulted on Basel 3.1 changes that could delay the internal models approach to start-2028. ISDA argued that splitting implementation of the standardized and internal models approaches increases complexity and recommended an opt-out mechanism to allow firms to defer the standardized approach to align with internal models implementation. On digital solutions, ISDA said Digital Regulatory Reporting would add support for Hong Kong rule updates later in September 2025 and that more than 120 buy-side and sell-side entities have adhered to the ISDA 2025 Notices Hub Protocol since the Notices Hub launched in July 2025.
ISDA 2025-09-16
International Swaps and Derivatives Association urges US capital rule fixes ahead of Treasury clearing and reports over 120 adherents to the Notices Hub Protocol
The International Swaps and Derivatives Association (ISDA) outlined priorities including readiness for mandatory US Treasury clearing by end-2026, completion of Basel III capital reforms, and adoption of the ISDA Notices Hub. Key issues include addressing capital framework changes to support client clearing, managing cross-jurisdictional Basel III implementation complexities, and expanding digital regulatory reporting.