ISDA®
INTERNATIONAL
SWAPS AND DERIVATIVES ASSOCIATION, INC.
NEWS RELEASE
For Immediate Release, Friday, July 3, 2009
For More Information, Please Contact:
Cesaltine Gregorio, ISDA New
York, +1 212-901-6019, cgregorio@isda.org
Donna Chan, ISDA Hong Kong, +852 2200 5906, dchan@isda.org
ISDA looks forward to discussing
the ideas in the Communication with the European Commission and other European
Union and national regulators. The Association also strongly supports a number
of the Commission’s goals, including increased transparency. ISDA supports the
development of options for users of OTC derivatives to undertake their business
in the most prudent and efficient manner and to the highest standards of
commercial conduct. We welcome the development of clearing and settlement
arrangements, which would provide the benefits of choice and flexibility to
participants within the sound industry framework developed by ISDA over the past
25 years; a framework that benefits from the significant counterparty credit
risk mitigants of legally enforceable netting and collateral arrangements.
The industry and ISDA have worked closely to introduce economic and contractual standardization, including hardwiring of auction terms into CDS contracts and other market practice changes which further facilitate central clearing. In the case of CDS, the industry has also worked to increase regulatory and market transparency, including transaction reporting.
ISDA welcomes the Commission’s
Communication as the Association has a strong interest in the central clearing
of CDS as one part of a strong and healthy market. At the same time, ISDA
values recognition by regulators of the continuing need for bilateral
customised transactions which by their nature are not suited for clearing.
ISDA believes that those exposed to
credit risk should have the option to choose the type of transaction that best
suit their business and risk management needs, as works so well for customers
in the equity, interest rate, commodity and FX sectors. Removing that flexibility, such as by forcing
bilateral participants to trade on an exchange or otherwise limiting the
availability of customized risk management solutions,
would be a step backwards.
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 830 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.
®ISDA is a registered trademark of the
International Swaps and Derivatives Association, Inc.