NEWS RELEASE
For Immediate Release,
For More Information, Please Contact:
Scott Marra, ISDA Press Office,
Derivatives Post-Trade Processing Continues to Improve,
According to
“ISDA’s survey indicates that, against a backdrop of robust
growth in our business, the industry continues to make real progress in strengthening
its operational infrastructure and reducing risk,” said Robert Pickel,
Executive Director and Chief Executive Officer, ISDA. “ISDA and our members have played an active
role in this effort through our documentation, operations and technology activities.
We remain committed to leading and supporting further improvement in 2007
and beyond.”
Large
firms have demonstrated strong progress in reducing levels of outstanding
confirmations across the asset classes. Large firms are those dealer institutions
that present periodic operational performance statistics to a group of international
regulators.
In
credit derivatives, outstandings fell from 16.2
days worth of business in 2006 to 5.5, with a reduction to 14 from 50 days
for rates products. Equity levels have fallen to 21 days from around 50, while
commodities stand at 7.5 days versus the prior year figure of 23.3 days.
In
another key area of credit derivatives post-trade processing -- the amount
of time it takes firms to generate and send credit derivatives confirmations
to their counterparties upon completing trades -- the survey indicates further
improvements are being made.
Among
the large firms, over 70 percent of credit derivatives confirmations are sent
out by T+1, up from 50 percent a year ago.
Although
the above results relate to the large firms grouping, we expect the underlying
downward trend to be reflected in the results for all firms which will be
set out in the survey report to be published in the coming weeks.
The
results of ISDA’s annual Operations Benchmarking
Survey are of particular interest because of increased attention to operational
issues from the industry and policy makers. At the strategic level, ISDA played
a lead role in working with a group of large firms that have been making commitments
to regulators in connection with reducing the level of outstanding confirmations.
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 approximately 780 member institutions from 54 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.