ISDA®
INTERNATIONAL SWAPS AND DERIVATIVES
ASSOCIATION, INC.
NEWS
RELEASE
For Immediate Release, Monday,
September 21, 2009
For More Information, Please
Contact:
Cesaltine Gregorio, ISDA New York,
+1 212-901-6019, cgregorio@isda.org
Deirdre Leahy, ISDA New York, +1
212-901-6021, dleahy@isda.org
Donna Chan, ISDA Hong Kong, +852
2200 5906, dchan@isda.org
ISDA Announces Further CDS Market Practice Changes
for Emerging Markets
LONDON,
Monday, September 21, 2009–
The International Swaps and Derivatives Association, Inc. (ISDA) today
announced market practice changes to the trading convention for credit default
swaps (CDS) in Emerging Markets as an additional step towards achieving
increased standardization, transparency and liquidity. These changes, which
will take effect on Monday, September 21, include the adoption of standardized
trading coupons and a move from monthly to quarterly payment dates in emerging
market CDS transactions.
“ISDA and the industry
continue to work on standardizing the way in which credit default swaps are
traded and settled,” said Robert Pickel, Executive Director and Chief Executive
Officer, ISDA. "These changes have increased market transparency, robustness and
confidence in the privately negotiated derivatives business.”
Changes
will include the following:
·
With regard to trades for Emerging Markets
in Central and Eastern Europe, the Middle East, Africa and Latin America:
o
Firms will adopt standardized coupons of
100bp and 500bp. Additional coupons for trading or back-loading could be
introduced at a later time if and when the need arises;
o
Firms will
switch from semi-annual to quarterly payments and full first coupons. The move
to quarterly payments applies to both the existing EM Transaction Types as well as the
new Standard EM Transaction Types and has no impact on trades prior to September 21, which will maintain their semi-annual payments even upon
novation or assignment.
·
With regard to trades for emerging
markets in
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 58
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.