ISDA®
INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.

NEWS RELEASE

For Immediate Release, Wednesday, April 22, 2009

For More Information, Please Contact:

Beijing Press Room: +86 10 65050879

Donna Chan, ISDA Hong Kong, +852 2200 5906, dchan@isda.org

Cesaltine Gregorio, ISDA New York, +1 212-901-6019, cgregorio@isda.org

Lauren Dobbs, Kennedy & Co., +1 914-961-2436, ext. 15, ldobbs@isda.org

Derivatives Post-Trade Processing Improves:

ISDA Operations Benchmarking Survey

BEIJING, Wednesday, April 22, 2009 – At its 24^th Annual General Meeting in Beijing, the International Swaps and Derivatives Association (ISDA) today released the results of the 2009 ISDA Operations Benchmarking Survey.

The Survey results show that trade processing continues to improve, especially in regard to confirmations outstanding. Credit derivatives, for example, show an average across all respondents over 2008 of 3.8 business days’ worth of outstanding confirmations, compared with 6.6 days for 2007.  Most other products showed similar improvements. 

This reduction in outstanding confirmations has developed despite widespread dislocations in various financial markets. Over-the-counter (OTC) derivative event volume increased by 2 percent, where events include new trades as well as actions such as novations and terminations. Increases occurred in commodity, interest rate and credit derivatives, particularly at large firms, while overall equity derivative and currency option event volumes decreased.  Last year, in comparison, OTC derivative event volume grew by 38 percent.

"The results of the 2009 ISDA Operations Benchmarking Survey are of particular interest because of the increased attention to operational issues from the industry and policy makers," said Robert Pickel, Executive Director and Chief Executive Officer, ISDA. "During the year, ISDA and its members have played a leading role in strengthening the operational infrastructure of the privately negotiated derivatives industry through our documentation, operational infrastructure and technology initiatives." 

Automation of processing functions also continues to progress, with credit derivatives showing by far the highest degree of automation of operational processes.  Equity derivatives show the lowest degree of automation. This is due to the more customized nature of many equity derivatives transactions compared with other products as well as the more diverse nature of the market participants.  Recognizing the opportunity for improvement, over 90 percent of respondents report that they plan to increase the automation of equity derivatives processing in the coming year, which will be supported by newly increased standardization of ISDA documentation.

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 820 member institutions from 57 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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