ISDA®
ISDA - INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.
NEWS RELEASE
For Immediate Release, Monday, December 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 Portfolio Reconciliation
Feasibility Study
Advances Understanding and Promotes
Better Collateral Management Practices
NEW YORK, Monday, December 21, 2009 – The International Swaps and Derivatives Association, Inc. (ISDA) today announced the publication of its “Feasibility Study: Extending Collateralized Portfolio Reconciliations”. This publication is intended to enhance understanding of the achievability for wider adoption of portfolio reconciliation discipline across the industry.
“While portfolio reconciliation is clearly a subject of interest in the privately negotiated derivatives industry, actual take-up across the broader community is still relatively nascent,” said Julian Day, Head of Trading Infrastructure, ISDA. “The level of engagement on this topic has been encouraging and productive. To this end, buy-side and sell-side firms will work collaboratively and with vendors to identify solutions to support a wider rollout of portfolio reconciliation during 2010.”
The Study discusses the considerations that exist for expansion of a frequent reconciliation for collateral portfolios beyond the group of 15 major dealers that regularly report progress and commitments relating to industry infrastructure projects ('Fed 15'). The Study has been undertaken by representatives of dealer and buy-side firms under the guidance of the ISDA Collateral Committee.
In July 2008, ISDA and derivatives industry participants made the first of a series of commitments to regulators regarding collateral management, including portfolio reconciliation. These commitments led to significant improvements in market practice towards the goals set by the Counterparty Risk Management Group III (CRMPGIII). Amongst these improvements was the adoption by June 30, 2009 of a daily portfolio reconciliation standard between the Fed 15 dealer firms.
Daily reconciliation between Fed 15 dealers covers an
estimated 60% of the global privately negotiated derivatives industry, across
all asset classes.
While this is a significant accomplishment in less than a
year from the first formal industry commitment, participants are committed to
addressing expansion to a broader constituency.
The Feasibility Study is available on the ISDA website: www.isda.org.
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.
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