Isda submits industry goals to New York Fed

The International Swaps and Derivatives Association has presented further standardisation goals for credit derivatives to the Federal Reserve Bank of New York

NEW YORK – The International Swaps and Derivatives Association has submitted its members’ goals to the Federal Reserve Bank of New York for strengthening operational efficiency across privately negotiated credit and equity derivatives.

The latest Isda offering – through its Operations Management Group (OMG) – aims to further develop the privately negotiated derivatives business through more standardised documents; the promotion of sound risk management principles and practice; and furthering market education.

“Isda is pleased to be a part of the industry effort to improve operational efficiency,” says Robert Pickel, executive director and chief executive officer at Isda.

The organisation has also discussed the incorporation of its off-the-shelf credit derivatives settlement auction mechanism into its documentation – launching a targeted “hardwiring” process to achieve this. The organisation will review progress on the issue with supervisors in May 2008.

Isda has organised nine auctions and protocols for the settlement of credit derivatives contracts. The most recent auction was used to settle single name, index and bespoke portfolio trades and boasted the most adherents to date.