Isda praises letter to Geithner on equity derivatives
The International Swaps and Derivatives Assocation (Isda) has said it “applauds and supports” a letter from 17 investment banks to Timothy Geithner, president of the Federal Reserve Bank of New York, which commits them to improving the efficiency of the equity derivatives market.
The banks said they will make it their “top priority” to create master confirmation agreements for equity derivatives, working closely and speedily with Isda. They aim to confirm all trades made electronically within five working days, and to confirm new (or more bespoke) transactions within 30 calendar days.
From the highest levels of July to September 2006, each bank pledged a 25% reduction in the volume of its trades outstanding for over 30 days by February 2007. They also set a target to complete and amend agreement templates on share and index variance swaps for Europe, the US and Asia by January 30. These would be accompanied by European client templates for index and single-share options and swaps by March 31. By this time, the banks also plan to be using computerised processing for all equity derivatives trades that are eligible for electronic processing.
The letter follows a meeting hosted by the Federal Reserve Bank of New York in September, when dealers and regulators reviewed progress on strengthening the infrastructure of the credit and equity derivatives markets. The letter said equity derivatives transactions took the longest time to confirm of all derivatives trades. Isda also believes equity derivatives represent the most diverse segment of the market as a whole. In September, the industry body valued the outstanding notional value of over-the-counter equity derivatives transactions at $6.4 trillion.
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 print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Revealed: the three EU banks applying for IMA approval
BNP Paribas, Deutsche Bank and Intesa Sanpaolo ask ECB to use internal models for FRTB
FCA presses UK non-banks to put their affairs in order
Greater scrutiny of wind-down plans by regulator could alter capital and liquidity requirements
Industry calls for major rethink of Basel III rules
Isda AGM: Divergence on implementation suggests rules could be flawed, bankers say
Saudi Arabia poised to become clean netting jurisdiction
Isda AGM: Netting regulation awaiting final approvals from regulators
Japanese megabanks shun internal models as FRTB bites
Isda AGM: All in-scope banks opt for standardised approach to market risk; Nomura eyes IMA in 2025
CFTC chair backs easing of G-Sib surcharge in Basel endgame
Isda AGM: Fed’s proposed surcharge changes could hike client clearing cost by 80%
UK investment firms feeling the heat on prudential rules
Signs firms are falling behind FCA’s expectations on wind-down and liquidity risk management
The American way: a stress-test substitute for Basel’s IRRBB?
Bankers divided over new CCAR scenario designed to bridge supervisory gap exposed by SVB failure