NEWS RELEASE
For Immediate Release, Wednesday, March 15, 2006
For More Information, Please Contact:
Lauren Dobbs, ISDA Press Office, Singapore, +65 68364766; Lauren@kennedycom.com
Scott Marra, ISDA New York, 212-901-6013, smarra@isda.org
Credit Derivatives Post-Trade Processing Continues to Improve,
According to ISDA Survey
Singapore, Wednesday, March 15, 2006 – While the number of credit swaps transacted by large firms more than doubled over the past year, these firms have significantly improved post-trade processing, according to a survey by the International Swaps and Derivatives Association. The preliminary results of the survey are scheduled to be discussed at ISDA´s Annual General Meeting in Singapore, which starts today.
For large firms, which are those institutions that conduct 1,500 or more swaps trades a week, the survey revealed that credit derivatives backlogs— the level of credit default swap confirmations outstanding—have decreased from 23.5 to 16.2 days worth of business. For all 62 respondents, the level of credit derivatives confirmations outstanding decreased from 13.2 to 12.6 days of business.
The survey also indicates that firms continue to reduce the amount of time it takes to generate and send credit derivatives confirmations to their counterparty upon completing trades. About 53 percent of respondents send out a confirmation by T+1—that is, within one day after the trade date—up from 33 percent a year ago. Similarly, 67 percent of respondents send a confirmation by T+2, compared with 50 percent a year ago; all but 9 percent are sent out by T+5. Among large firms, 50 percent send out confirmations by T+1, 63 percent by T+2, and 100 percent by T+5.
“Derivatives industry participants have committed to improving their operational and back-office processes, even as volumes continue to increase” said Robert Pickel, ISDA CEO and Executive Director. “Initiatives to generate further improvement, such as the ISDA Novation Protocol, are gaining traction and will enable firms to reduce their operational risks even further.”
About ISDA
ISDA, which represents participants in the privately negotiated derivatives
business, is the largest global financial trade association by number of member
firms. ISDA was chartered in 1985, and today has approximately 700 member
institutions from 50 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.