For further information contact:
ISDA New York - Milton Bellis,(1 212)332-1202; e-mail mbellis@isda.org

ISDA ISSUES EXPOSURE DRAFT OF CREDIT SUPPORT PROVISIONS

AMSTERDAM, Thursday, March 16, 2000 -- The International Swaps and Derivatives Association (ISDA) will publish on its website early next week an exposure draft of credit support provisions called the 2000 ISDA Credit Support Provisions. Resulting from recommendations in the 1999 ISDA Collateral Review published last March, the new provisions will consolidate and upgrade credit support documentation.

ISDA has set a 60-day period for comment, during which a focus group will begin to address implementation issues. Discussion meetings and other educational efforts will be conducted in Asia, Europe and North America over the coming months, leading up to anticipated publication of the final document in the fourth quarter of this year.

Two working groups developed the exposure draft, one composed of lawyers with expertise in ISDA credit support documentation and the other group of senior collateral practitioners who laid down six objectives for the new provisions:

  • shorten the time it takes to process collateral arrangements
  • provide a practical dispute resolution procedure
  • broaden the role of collateral documentation to motivate risk-reducing behavior
  • reduce elective and variable components of collateral documentation
  • simplify definitions and documentation language
  • streamline the structural architecture of collateral documentation

    The draft provisions propose standards in a number of areas that may be difficult to meet initially, but the intent of those involved in the project is to establish goals toward which the collateral management function at institutions can evolve.

    The exposure draft of 2000 ISDA Credit Support Provisions may be downloaded as a Word 97 document or as a pdf file.

    ISDA is the industry association for the world's leading participants in swaps and other privately negotiated derivatives transactions. Its more than 460 member organizations include banks and other financial institutions, government entities, corporations and professional service providers.