ISDA®
INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.
NEWS RELEASE
For Immediate
Release Thursday, April 17, 2008
For More Information, Please Contact:
Vienna Press Room: +43 1
71700 12146
ISDA PROPOSES HARMONIZATION OF NETTING IN
The proposal is for a European Union (EU) instrument
on netting by way of either amending the EU Directive on Financial Collateral Arrangements
or by drafting a separate directive and it is based on ISDA’s
law reform work in Central and Eastern Europe (CEE) countries and across the EU.
European Central Bank President, Jean-Claude Trichet, endorsed the idea of EU-wide netting harmonization
at ISDA’s 2007 Annual General Meeting in
In December 2006, the EU Commission
in its evaluation of the implementation of Collateral Directive acknowledged
the need to improve the EU legal framework with regard to netting and set-off.
One
way of addressing the aforementioned suggestion would be to expand the scope of
the Collateral Directive by adding substantive provisions on netting.
Alternatively, an EU instrument on netting only could be considered.
On
the global level of law reform beyond the EU, ISDA has expressed its support
for the proposal on a Convention on Netting in Financial Services as made by International
Institute for the Unification of Private Law (UNIDROIT).
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 25 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.