ISDA Publishes English/Chinese Glossary of Collateral Terms

Singapore, Thursday, January 5, 2006 – The International Swaps and Derivatives Association (ISDA) has today published an English/Chinese Glossary of Collateral Terms. The Glossary provides an overview in English and a translation into Mandarin of key terms and concepts relating to the use of collateral in managing derivatives exposures.

The Glossary is intended to serve as an educational reference tool and as a practical guide for collateral practitioners in relation to privately negotiated derivatives trades when the use of both English and Chinese languages are required.

“ISDA is committed to working with public policymakers and market practitioners to further encourage the prudent and efficient development of the privately negotiated derivatives business in China,” said Robert Pickel, ISDA executive director and chief executive officer. “A fundamental part of that commitment involves educating constituencies on the importance of sound risk management practices. The Glossary will enhance understanding of collateral arrangements and their value as credit risk mitigation tools.”

ISDA surveys show that the use of collateral in privately negotiated derivatives transactions and related margined activities continues to grow significantly. Major derivatives counterparties collateralize, on average, over 50% of their derivatives mark-to-market exposures.

“Given the significant increase in transaction volumes in the privately negotiated derivatives markets in China, the use of collateral as a credit risk mitigation tool is ever more important for all parties involved,” said Mark R. Brown, ABN Amro’s Head of Portfolio Strategy & Execution/CEM, Asia Pacific, and Chairman of ISDA’s Asia-Pacific Collateral Committee. “In order to help the Chinese derivatives market to grow and fulfill its potential, we felt that a Mandarin glossary could help people unfamiliar with derivatives collateral gain an understanding of important collateral concepts and mechanisms.”

The Glossary of Collateral Terms – Chinese Translation was complied by a working group organized under the auspices of ISDA’s Asia-Pacific Collateral Committee. ISDA members who provided assistance to this project include: ABN Amro Bank N.V., Allen & Overy, Barclays Capital, Bank of America, China Development Bank, Citibank N.A., Commonwealth Bank of Australia, DBS Bank, HSBC Holdings plc, JP Morgan Chase, Standard Chartered Bank, UBS AG and United Overseas Bank.

About ISDA
ISDA is the global trade association representing leading participants in the privately negotiated derivatives industry. ISDA was chartered in 1985, and today has more than 650 member institutions from 47 countries on six continents. These members include most of the world's major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org.

^®ISDA is a registered trademark of the International Swaps & Derivatives Association, Inc.