What's New in ISDA SIMM Version 2.7+2412.1?
In this blog, we break down the key updates in ISDA SIMM 2.7+2412.1, including the new versioning scheme and adjustments to risk weights, correlations, and concentration thresholds across asset classes.
Blog Posts
Discover our latest industry insights, technical articles and more about clearing risk management for exchange-traded derivatives.
AI in Capital Markets: IOSCO’s latest report signals greater scrutiny ahead
Artificial intelligence is no longer just an emerging trend in capital markets—it’s becoming embedded across trading, risk management, compliance, and operations. Recognising the speed of this transformation, IOSCO released a consultation report titled “Artificial Intelligence in Capital Markets: Use Cases, Risks, and Challenges.”
Why Central Clearing Still Matters
As derivatives markets evolve, questions of transparency, risk visibility, and price discovery have come back into focus. In its recent report, “Shining a Light on Derivatives,” WFE makes a clear case for the enduring value of exchange-traded, centrally cleared derivatives and warns of risks if market structures drift too far from transparency.
How generative AI is transforming risk management for clearing brokers in derivatives markets
The rapid development of artificial intelligence is spurring many firms in the global derivatives markets to look for ways to deploy this new technology. In this article, executives from Cumulus9 and Chata.ai point to risk management as an area where AI can have a transformative impact.
What's New in ISDA SIMM Version 2.7: Key Updates and Implications
In this blog, we'll delve into the key changes introduced in ISDA SIMM 2.7 compared to the previous version 2.6, focusing on adjustments in risk weights, correlations, and concentration thresholds across all asset classes.
Strengthening Operational Resilience in Financial Markets
Operational resilience in financial services ensures firms can withstand and recover from disruptions, maintaining critical operations under adverse conditions. This concept is crucial due to increasing risks from cyber threats, technological failures, and other operational challenges.
Insights from ESMA's 2023 Global CCP Fire Drill
As derivatives market participants, staying informed and prepared for potential market disruptions is critical. The recent ESMA report on the 2023 global CCP fire drill offers valuable insights and highlights the importance of these exercises in enhancing the resilience of the financial system.
The Impact of AI and Tokenization on Capital Markets
In an era where technology continuously reshapes the landscape of industries, the futures and options markets are on the cusp of a significant transformation. FIA Boca 2024 illuminated this trajectory, focusing on the revolutionary roles of artificial intelligence (AI) and tokenization in global capital markets.
2023 Annual ETD Margin Rates Overview
Margin rates in the global exchange-traded derivatives markets have reached record-high levels. An insightful analysis of margin rates and anticipating their direction, particularly in the energy sector.
Navigating a New Era in Derivatives Clearing
The landscape of global central counterparty margin models has witnessed a significant transformation in risk management. Central to this shift is the migration from the long-established SPAN model to various VaR-based models.
The U.S. Treasury Market Reforms
The U.S. Treasury market, integral to the U.S. and the global financial system, has evolved significantly over the past decades, representing a staggering 95% of the U.S. GDP today, compared to just 34% 20 years ago.
Understanding ISDA SIMM
As the landscape of derivatives trading continues to evolve, it is crucial for market participants to be well-versed not only in central counterparty (CCP) initial margin requirements but also in the nuances of uncleared derivatives margin.
DORA: A guide for derivatives market participants
In a rapidly evolving digital landscape, the financial sector, including the derivatives markets, faces unprecedented challenges in terms of cyber threats and information and communication technology (ICT) related disruptions.
Navigating cyber resilience in the futures industry
The recent cyber incident involving ION, a major vendor in the financial industry, served as a wake-up call. The industry’s operational resilience was tested and the consequences were significant.
The future of FMI regulation in the fintech era
As we navigate through the exciting digital landscape of fintech, we stand on the brink of a new era. We have been witnessing the increasing advancement and adoption of innovative technologies, including cloud computing, artificial intelligence and Web 3.0.
The need for margin calls transparency
The Covid-19 pandemic has caused a period of high market volatility in March 2020. Notably, large increases in aggregate margin requirements were seen in both the centrally and non-centrally cleared markets.
Bachelier 1900 vs Black 1976
As the price of crude oil futures plummeted to -$40 a barrel, the Black 1976 options pricing model - which cannot handle negative prices - was switched to the Bachelier model. But what are the implications of this switch?
A validation of SPAN in times of market stress and how the margin requirement of a CME Eurodollar option spiked by 510% in just one day
Derivatives users are probably aware of the Standard Portfolio Analysis of Risk (SPAN) method used by most CCPs globally. Many would say that an update to the decades-old SPAN methodology is long overdue. For this reason, CCPs are gradually shifting from SPAN to VaR-based methodologies for margin calculation.