ISDA and AFME Letter Warning Against European Clearing Capital Rules

The International Swaps and Derivatives Association (ISDA) and the Association for Financial Markets in Europe (AFME) submitted a joint letter to the European Commission asserting that the EU's interpretation of the international Basel standards would "materially increase" regulatory capital requirements for European institutions, both as clearing members and as clearing customers. Regulators are transcribing the Basel III framework into European law through the fourth Capital Requirements Regulation and Directive. However, ISDA and AFME argue that the European capital rules are inconsistent with the Basel guidelines, and thereby effectively limit direct access to central clearing as well as clearing members' capacity for offering clearing services to third parties. The Annex to the letter also includes tables that set out the material differences and additional inconsistencies.

View letter in full here (links externally to PDF).