Isda readies inflation documentation

An increase in the use of inflation derivatives has prompted the International Swaps and Derivatives Association to set up a task force to develop standardised documentation for transactions. The first draft of the documentation has been completed and Isda is on course to finish the project by the end of the year.

Growth in the inflation derivatives arena is related to the flourishing inflation-linked bond market. This is Isda’s first crack at creating inflation derivatives documentation and the trade organisation aims to create standard language to further facilitate deals.

Isda is currently dealing with its energy and commodity derivatives documentation project. It is updating and expanding the original definitions originally set in 1993 and revised in 2000. This project should also be completed by the end of the year.