ISDA, SIFMA and FIA Comments on Enhanced Supplementary Leverage Ratio Reforms

Washington, D.C., August 26, 2025 - The International Swaps and Derivatives Association, Inc (ISDA), the Securities Industry and Financial Markets Association (SIFMA), and the Futures Industry Association (FIA) today submitted a joint comment letter to the Federal Reserve, FDIC, and OCC strongly supporting the proposed recalibration of the Enhanced Supplementary Leverage Ratio (eSLR) and related Total Loss-Absorbing Capacity (TLAC) and Long-Term Debt (LTD) requirements.

"We fully support these policy goals - that is, helping to restore the eSLR to its proper role as a backstop to risk-based capital requirements and mitigating limitations on the ability of banking organizations to intermediate in U.S. Treasury markets, which is particularly pressing given the impending industry move to mandatory clearing for U.S. Treasuries," ISDA, SIFMA and FIA wrote in the letter.

The Associations emphasized the urgency of finalizing and implementing the rule no later than January 1, 2026.

Key points from the letter include:

• Support for Proposal: The recalibration would reduce the likelihood that eSLR serves as a binding constraint, restoring its intended role as a backstop and enhancing participation in low-risk, high-volume activities such as U.S. Treasury intermediation.
• Market Functioning: Properly calibrated leverage rules are essential to ensure liquidity and resilience in U.S. Treasury markets, particularly as mandatory clearing expands.
• Broader Framework Review: The Agencies should conduct a comprehensive review of the U.S. regulatory capital framework to ensure it promotes growth, mitigates risks, and reflects risk-reducing practices such as cross-product netting.
• Further Enhancements: The Associations recommend recognition of cross-product netting under the standardized approach, consideration of reforms to Tier 1 leverage ratio requirements, , and elimination of redundant LTD requirements for U.S. GSIBs.

The Associations concluded that their recommendations would make the U.S. regulatory capital framework more risk-sensitive, efficient, and better aligned with broader economic policy objectives, stating "we are strongly committed to maintaining the safety and efficiency of U.S. financial markets and hope the Agencies implement our recommendations, which reflect the extensive knowledge and experience of market professionals within the Associations and our members. Our recommendations are designed to make the U.S. capital framework more risk sensitive to promote the functioning of the framework across market conditions and throughout the business cycle."

The full comment letter can be found here.

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Since 1985, ISDA has worked to make the global derivatives markets safer and more efficient. Today, ISDA has over 1,000 member institutions from 76 countries. These members comprise a broad range of derivatives market participants, including corporations, investment managers, government and supranational entities, insurance companies, energy and commodities firms, and international and regional banks. In addition to market participants, members also include key components of the derivatives market infrastructure, such as exchanges, intermediaries, clearing houses and repositories, as well as law firms, accounting firms and other service providers. Information about ISDA and its activities is available on the Association's website: https://www.isda.org. Follow us on LinkedIn and YouTube.

SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry's nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit https://http://www.sifma.org.

FIA is the leading global trade organization for the futures, options, and centrally cleared derivatives markets, with offices in Brussels, London, Singapore and Washington, D.C. FIA's mission is to support open, transparent, and competitive markets; protect and enhance the integrity of the financial system; and promote high standard professional conduct. FIA's membership includes clearing firms, exchanges, clearinghouses, trading firms and commodities specialists from about 50 countries as well as technology vendors, law firms and other professional service providers.