ISDA's Response to CFTC on Perpetual Derivatives

ISDA's Response to CFTC on Perpetual Derivatives

Introduction

The International Swaps and Derivatives Association (ISDA) has submitted a comment letter to the US Commodity Futures Trading Commission (CFTC) regarding the trading and clearing of 'perpetual' style derivatives. This response, filed on May 21, 2025, emphasizes the necessity for a robust regulatory framework tailored to the unique characteristics and risk management needs of perpetual derivatives.

Regulatory Framework and Risk Management

ISDA's letter underscores the importance of a comprehensive regulatory framework that can effectively address the distinct design and risk management features of perpetual derivatives. The association draws on its extensive experience in the digital asset space to highlight several key initiatives that are pertinent to this discussion.

One of the primary initiatives mentioned is the development of standardized legal documentation through the ISDA Digital Asset Derivatives Definitions. This effort aims to mitigate legal uncertainty and counterparty risk for over-the-counter (OTC) products that reference digital assets such as Bitcoin and Ether. By establishing clear legal standards, ISDA seeks to enhance the stability and reliability of these emerging markets.

In addition to legal documentation, ISDA has also explored bankruptcy risk management strategies for digital asset markets. This includes addressing critical issues such as close-out netting and custody arrangements. These efforts are crucial for ensuring the resilience of digital asset markets in the face of potential financial distress.

Engagement with Global Regulators

ISDA continues to actively engage with global regulators on policy matters related to the classification, custody, and systemic risk of digital assets. The association is committed to fostering a collaborative dialogue between regulators and market participants to address these complex issues.

Furthermore, ISDA is examining how emerging technologies, such as smart contracts and distributed ledger infrastructure, can support the safe execution and clearing of digitally native or perpetual instruments. These technologies have the potential to revolutionize the derivatives market by enhancing transparency, efficiency, and security.

Conclusion

ISDA welcomes further engagement between the CFTC and market participants to explore these issues in greater depth. The association believes that a collaborative approach is essential for developing a regulatory framework that can effectively support the growth and stability of perpetual derivatives markets.

Quelques pistes pour l'intégration opérationnelle dans votre dispositif :

- Évaluer l'impact des nouvelles définitions de l'ISDA sur vos contrats existants.

- Mettre en place des stratégies de gestion des risques de faillite pour les actifs numériques.

- Collaborer avec les régulateurs pour anticiper les évolutions réglementaires.

- Explorer l'utilisation de technologies émergentes pour améliorer l'exécution et le clearing des instruments dérivés.