ISDA®
INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.
NEWS RELEASE
For Immediate
Release Wednesday, April 16, 2008
For More Information, Please Contact:
Vienna Press Room: +43 1
71700 12146
DERIVATIVES
POST-TRADE PROCESSING CONTINUES TO IMPROVE
The initial results show that despite significant
growth in monthly volumes for most over-the-counter (OTC) derivative products,
post-trade processing has been able to keep pace and in many cases improve
over previous years, according to the survey.
Monthly OTC derivative volumes grew by 38 percent
across all products, with credit derivatives showing the strongest growth
at 73 percent. Large firms experienced even greater increases, reporting 87
percent growth in credit derivative volumes.
In the main asset classes, business days’ worth
of outstanding confirmations is lowest for credit derivatives at 6.6 days,
followed by interest rate products at 9.9 business days and 13.3 for equities.
In interest rate and credit derivatives, 90 percent of electronic confirmations
are normally sent by T+1 (within one day of trade date); equity derivatives
reach those levels by T+4.
“ISDA’s efforts to standardize
documentation further, together with the industry’s commitments to ‘onboard’
clients to automated platforms, should lead to a drop in these figures over
the coming year,” said Robert Pickel, Executive Director and Chief Executive
Officer of ISDA.
Trade data transfer from front office to operations
is now highly automated for all products, averaging 79 percent across respondents.
The highest level of automation of confirmation matching is in credit
derivatives, averaging 62 percent across all respondents; the lowest is in
equity derivatives at 23 percent.
Settlement volumes more than doubled in the main
asset classes as a result of the increase in overall trade volumes as well
as the ongoing need to settle recurring payment obligations. Automated solutions
for payment netting and central settlement services, particularly for credit
derivatives, have helped firms handle the increases in settlement volumes.
Data submitted by participants cover the calendar
year 2007. This year’s survey saw the highest level of participation since
the creation of the survey in 2000, with 79 respondents including all major
OTC derivative dealers. It is also
the first survey that includes a provider of processing services to hedge
funds and other buy-side clients.
About ISDA
ISDA, which represents participants
in the privately negotiated derivatives industry, is among the world’s largest
global financial trade associations as measured by number of member firms.
ISDA was chartered in 1985, and today has over 825 member institutions from
55 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.
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is a registered trademark of the International Swaps & Derivatives Association,
Inc.