In a recent episode of The Swap: A Modernization Agenda, ISDA’s new board chair and Managing Director at Goldman Sachs, Amy Hong outlined her priorities for 2026, returning repeatedly to the association’s long-standing mission and describing how technologies such as tokenization and artificial intelligence could reshape derivatives markets.
“My top priority is to uphold ISDA’s mission to foster safe and efficient derivatives markets,” Hong said. “That’s been ISDA’s mission for the past 40 years. It will remain our North Star.”
ISDA represents “over 1,000 member institutions from 78 different countries who have put their trust in us to make the global derivatives markets safer and more efficient,” she said, adding that it is “incumbent on the staff, the board… to represent our members’ priorities.”
That includes continuing to advance “standardization and legal certainty across jurisdictions so that derivatives markets function predictably and consistently” and advocating for “an appropriate risk-sensitive capital framework to facilitate deep and liquid derivatives markets.” Finalization of the Basel III trading book rules, she noted, “remains a high priority.”
Hong framed modernization in two parts. “First, we need to encourage and facilitate the use of novel technologies like artificial intelligence and tokenization to enhance efficiencies in derivatives,” she said. “And we also need to make sure that the regulatory framework is fit for purpose.”
“Markets are evolving quickly, driven by these technological advancements, and the regulatory framework needs to be streamlined and harmonized to support capital markets, which are so critical to economic growth,” she said.
“It all boils down to modernizing derivatives markets with a keen focus on the issues that matter most to our members.”
Hong stressed that digitization is not new for ISDA. “Over the past 40 years, we’ve created industry standards, we’ve driven legal and regulatory certainty, and we’ve developed mutualized solutions for the industry,” she said.
She pointed to Digital Regulatory Reporting (DRR), which members use “to improve the accuracy of reported data, cutting costs and reducing the risk of misreported data.” DRR is underpinned by the Common Domain Model, which she described as “an open-source data standard for financial products, trades and life cycle events.”
ISDA’s MyLibrary platform now hosts “over 175 derivatives documents and document versions in digital form,” she said, while ISDA Create allows firms to negotiate and execute contracts digitally. “Firms can access the specific details of their negotiated trades with just a few clicks of a mouse, giving them a complete picture of their exposures.”
She also cited the ISDA Notices Hub, created to address risks tied to the physical delivery of termination notices. The platform “enables the rapid delivery and receipt of termination notices, eliminating risk exposures and potential losses that can result from delays in terminating derivatives contracts.” More than 150 parties have adhered so far, she said.
Turning to tokenization, Hong acknowledged uncertainty. “There are more questions than answers at this point,” she said.
At the end of 2024, leading derivatives market participants subject to non-cleared margin rules had collected “one and a half trillion dollars of initial and variation margin,” according to ISDA’s margin survey, she noted.
As margin volumes have grown, the use of cash as collateral has declined, she said, but some counterparties remain reluctant to accept anything other than cash or government securities because of “operational complexity and capital impact.”
She offered money market funds as an example. Under current workflows, holdings must be liquidated and posted as cash, which may then be reinvested. “This takes time, it adds costs, it creates operational challenges and can exacerbate selling pressure during periods of market stress,” she said.
“Tokenization could potentially help to alleviate some of these workflow challenges by enabling holdings in a money market fund to be posted almost immediately without any need to liquidate the position,” she said. “That would be a big efficiency.”
ISDA’s focus, she said, will be on “clear and consistent legal and regulatory frameworks” and ensuring that derivatives transactions on tokenized assets are supported by “robust documentation and legal opinions.” Interoperability, underpinned by common data standards like the CDM, will also be key “to reduce fragmentation and enable scalable cross-platform connectivity.”
On digital assets and stablecoins, Hong said: “There’s a lot of activity in this space.” The CFTC’s pilot allowing certain digital assets to be used as collateral is “an interesting initiative,” she said, noting regulators have emphasized that accepting stablecoins as margin must be accompanied by “robust risk management practices.”
ISDA’s role, she said, centers on “legal certainty and standard documentation.” In 2023, the association published its Digital Asset Derivatives Definitions, creating “an unambiguous contractual framework for digital asset derivatives.” It has also issued white papers addressing close-out netting and collateral arrangements and has worked with other trade associations to highlight “the punitive capital requirements for crypto asset exposures.”
On artificial intelligence, Hong said: “AI will undoubtedly have a transformational impact,” she said. Financial institutions are already using AI for “manually intensive tasks like data analysis or Know Your Customer checks,” she noted. She sees potential for AI in legal work, such as “drafting initial versions of contracts or quickly parsing through legal agreements.”
She pointed to a recent proof of concept showing how AI can extract key provisions from ISDA credit support annexes “with a high level of accuracy,” and referenced an ISDA request for proposal for an AI solution to identify why and when certain DRR coding decisions were made. The solution, she said, will provide “a full audit trail of the coding process” and allow further validation of reported data “with much less human effort.”
Hong added that she is “keen for ISDA to use AI in its day-to-day operations to ensure the focus of the ISDA staff is on high-value tasks and advocacy rather than manual, time-intensive chores.”
“There’s a tremendous amount of productivity to be unlocked on a cumulative basis,” she said.
Modernization also means refining regulation, Hong said. ISDA has “years of experience and a wealth of data” to help identify how to improve the framework as markets evolve.
While reforms such as resolution stay protocols, margin rules for non-cleared derivatives and LIBOR fallbacks have made markets safer, she said parts of the framework still require alignment. Regulatory reporting, in particular, has often been “inconsistent, duplicative and costly to implement.”
Ultimately, the board wants ISDA to advocate for “a regulatory regime that is efficient, avoids unnecessary complexity and supports economic growth,” she said.
