For
Immediate Release, Wednesday, March 16, 2005
For More Information, Please Contact:
Louise Marshall, +1 212 901
6000, lmarshall@isda.org
Susan Hartzell, Kennedy &
Company, +1 914 961 2436, susan@kennedycom.com
Automation of Processing in Privately Negotiated
Derivatives Accelerates, Says ISDA: Credit Derivatives Lead the Way
The
automation of trade confirmations in the privately negotiated derivatives
business is accelerating, ISDA reported today.
The issue is scheduled to be discussed at ISDA´s
Annual General Meeting in
ISDA
estimates that on average 20 percent of plain vanilla swaps, and one-third of
credit derivatives, are now being confirmed on an automated basis. This represents substantial growth in
confirmation automation over the past year; approximately 13 percent of vanilla
swaps and 6 percent of credit derivatives were estimated to have been
electronically confirmed in a survey ISDA conducted a year ago.
The trend
toward automation reflects the fact that available technological solutions are
being adopted and used by more firms at more of their trading locations around
the world. It also comes as a response
to the continuing growth in the derivatives markets and the need for firms to
achieve higher levels of operational efficiency in handling both derivatives
confirmations and cash processes.
“Our
findings indicate that the industry in general and many firms in particular
recognize the opportunity that automated solutions offer in decreasing
operational risk and improving operational efficiency,” said Bob Pickel, ISDA
executive director and chief executive officer.
“The continuing adoption and usage of automated solutions gives further
impetus to efforts underway by ISDA and the industry to achieve additional
progress in this area.”
Mr. Pickel
noted that ISDA continues to measure progress toward increasing automation
among firms in a number of ways in order enable market participants to
benchmark their performance. He also
said that ISDA will remain focused on promoting solutions based on FpML that facilitate the spread of automated processes in
the industry.
About ISDA
ISDA is the global trade association representing leading participants in the
privately negotiated derivatives industry. ISDA was chartered in 1985, and
today has more than 625 member institutions from 47 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.