ISDA®

INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION

NEWS RELEASE

For Immediate Release March 1, 2004

For More Information, Please Contact:

Louise Marshall, ISDA New York, (212) 901-6000, lmarshall@isda.org

ISDA APPLAUDS CBRC DERIVATIVES RULES

New York, March 1, 2004 – The International Swaps and Derivatives Association welcomes the implementation of the Interim Rules on Derivatives Business of Financial Institutions by the China Banking Regulatory Commission, the first set of major regulations governing derivatives business in China.

The rules, which become effective today, set forth the definition of a derivative, the approval requirements for qualifying financial institutions, and the control requirements that such institutions must observe when entering into derivatives transactions.

“A firm legal foundation is critical to the effective development of safe, efficient and liquid transaction of bilaterally negotiated derivatives contracts,” said Robert Pickel, Executive Director and Chief Executive Officer of ISDA. “These rules will play the most significant and fundamental role in facilitating the use of these important risk management tools in the rapidly evolving economic landscape of China.”

The rules, which apply to all banks, most non-bank financial institutions, and branches of foreign banks in China, require these institutions to obtain CBRC approval before conducting derivatives business in China.

ISDA and its membership, through the Asia-Pacific Legal and Regulatory Committee, have been instrumental in lobbying for an appropriate legal and regulatory framework within the People’s Republic of China and have been active in advising and commenting on the Commission’s draft rules throughout the process. Implementation of the rules marks a major step in the advancement of the privately negotiated derivatives markets in the Asia-Pacific region and the ability of local corporate entities to hedge the economic risks they encounter in the course of their business.

PLEASE NOTE: An English language Q&A on the rules is available from ISDA’s Singapore office at +(65) 6538-3879 or from ISDA’s New York office at +(1) 212 901 6000.

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 600 member institutions from 46 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.

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