From Archegos in the US to the energy crisis in the EU to the problems faced by liability-driven investment (LDI) strategies in the UK, recent events have meant derivatives transparency is once again becoming a public policy agenda priority. Some regulators have voiced concerns about whether they can see and monitor risk exposures at counterparties in their jurisdictions and even whether some relevant counterparties are beyond their regulatory reporting perimeter.
These concerns come amid – and despite – prescriptive requirements to report derivatives transactions to regulators via trade repositories in major jurisdictions, which has been accomplished through significant investment in time and money by market participants and the official sector.
ISDA believes much of the information required to see and identify the build-up of derivatives exposures and risks is available in the trade repository data that is reported to regulators. But, as per the title of this report, it may well be hidden in plain sight – not easily understood, not readily functional, not easily shared among regulators and therefore not as useful as it might otherwise be.
To help inform and contribute constructively to policy discussions on derivatives transparency, ISDA is publishing this paper to explore the following questions:
- What information on derivatives trades and exposures is currently available to policymakers through trade repositories?
- How can this information be efficiently and effectively used by policymakers to address their risk exposure concerns?
- How can derivatives trade and risk data be shared by regulators that receive it with other policymakers within and across jurisdictions, in order to provide a more holistic view?
The paper covers derivatives reporting and trade repositories in the US, EU and UK.
Click on the attached PDF to read the full report.
Documents (1) for Hidden in Plain Sight? Derivatives Exposures, Regulatory Transparency and Trade Repositories
Latest
Transition to Mandatory Central Clearing
US Treasury securities sit at the heart of global financial markets and serve as one of the primary forms of high-quality collateral across derivatives and securities financing markets. The transition to mandatory central clearing of US Treasuries therefore has implications...
ISDA Publishes Updated ISDA SIMM Governance
ISDA has published an updated version of the ISDA SIMM® Governance Framework, which sets out the principles under which the ISDA Standard Initial Margin Model® operates and the process through which it will be reviewed and amended on a consistent...
ISDA Response to PRA IMA Consultation
On September 18, ISDA, the Association for Financial Markets in Europe, the Institute of International Finance and UK Finance submitted a joint response to the UK Prudential Regulation Authority consultation on adjustments to the internal model approach (IMA) for the...
Calibration Test – IQ September 2026
Calibrating capital requirements is a highly complex undertaking and getting it wrong can have serious consequences. Too much lenience might lead to banks holding insufficient capital to mitigate their risks. But excess conservatism can put balance sheets under strain, forcing...