Isda launches final stage of hard-wiring auction settlement

Daily news headlines

NEW YORK - The International Swaps and Derivatives Association has embarked on the final stage of its 'hard-wiring' process for the incorporation of auction settlement terms into standardised credit default swap (CDS) documentation.

According to Isda, the launch of its auction settlement supplement and protocol removes the need for existing credit event protocols that require dealer and buy-side representatives to determine whether credit events have taken place and 'credit and succession event backstop dates' that institute a common standard effective date for CDS trades.

In combination with the changes in market practice that support standard coupons for CDSs, these developments will introduce greater certainty to transactional, operational and risk considerations for treatment of CDSs.

"This is a major milestone in the ongoing refinement of practices and processes for the efficient, liquid and transparent conduct of the CDS business," said Robert Pickel, Isda's executive director and chief executive officer. "Hard-wiring is central to the many improvements Isda and the industry are making to the CDS contract to further ensure that infrastructure and standards for transacting these important risk management instruments are straightforward, secure and widely implemented."

"Isda welcomes the commendation of these developments by the Senior Supervisors Group in its report, 'Observations on Management of Recent Credit Default Swap Credit Events'. Supervisory recognition that these efforts will reduce uncertainty and make credit event management more operationally efficient is extremely encouraging," said Pickel.

Isda released a webcast addressing its initiatives changes which is available here.

http://secure.webex.com/g2.asp?id=YWM03NZS

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.

Investment banks: the future of risk control

This Risk.net survey report explores the current state of risk controls in investment banks, the challenges of effective engagement across the three lines of defence, and the opportunity to develop a more dynamic approach to first-line risk control

Op risk outlook 2022: the legal perspective

Christoph Kurth, partner of the global financial institutions leadership team at Baker McKenzie, discusses the key themes emerging from Risk.net’s Top 10 op risks 2022 survey and how financial firms can better manage and mitigate the impact of…

Emerging trends in op risk

Karen Man, partner and member of the global financial institutions leadership team at Baker McKenzie, discusses emerging op risks in the wake of the Covid‑19 pandemic, a rise in cyber attacks, concerns around conduct and culture, and the complexities of…

Moving targets: the new rules of conduct risk

How are capital markets firms adapting their approaches to monitoring and managing conduct risk following the Covid‑19 pandemic? In a Risk.net webinar in association with NICE Actimize, the panel discusses changing regulatory requirements, the essentials…

Building resilience into ESG risk management

Risk and resilience continue to play an important role in the navigation of an increasingly uncertain world. Fusion Risk Management explores why it is equally crucial for technology to support organisations in addressing pertinent environmental, social…

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: