Automated processing of derivatives increasing, says Isda

Automated trade confirmations account for around one-third of all credit derivatives transactions and 20% of plain vanilla swaps trades, according to the International Swaps and Derivatives Association (Isda).

That’s a significant increase from an Isda survey one year ago, which found that only 6% of credit derivatives and 13% of plain vanilla swaps trades are electronically confirmed.

“Our findings indicate that many firms recognise the opportunity that automated solutions offer in decreasing operational risk and improving operation efficiency,” said Bob Pickel, Isda’s chief executive. He added that Isda will remain focused on promoting Financial products Markup Language- (FpML-) based solutions to increase take-up of automated confirmations.

Despite this, the growth in overall volumes, particularly in credit derivatives, seems to have outpaced the development and take up of automated technologies.

In February, Gay Huey Evans, head of the capital markets sector at the UK’s Financial Services Authority, sent letters to the chief executives of investment banks expressing concern over the level of unsigned credit derivative trade confirmations.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Chartis RiskTech100® 2024

The latest iteration of the Chartis RiskTech100®, a comprehensive independent study of the world’s major players in risk and compliance technology, is acknowledged as the go-to for clear, accurate analysis of the risk technology marketplace. With its…

T+1: complacency before the storm?

This paper, created by WatersTechnology in association with Gresham Technologies, outlines what the move to T+1 (next-day settlement) of broker/dealer-executed trades in the US and Canadian markets means for buy-side and sell-side firms

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here