Isda introduces online information resource

The International Swaps and Derivatives Association (Isda) has introduced a new online information resource for its members called netalytics, which covers the validity and enforceability of the close-out netting provisions of the Isda master agreements. Master agreements are international contractual standards governing privately negotiated derivatives transactions, which aim to reduce legal uncertainty and allow for reduction of credit risk through netting of contractual obligations.

"Netalytics is another example of Isda's commitment to using technology to facilitate the business of our members," said Isda chief executive Robert Pickel. "Its easy-to-use features make it a cost-effective and time-saving mechanism that will help our members reduce their legal and credit risks."

Netalytics enables members to determine at a glance whether they can enter into transactions with a counterparty organised in any of the jurisdictions covered by the Isda netting opinions under the protection of the netting provisions of the master agreements. It also features cross-jurisdictional comparative analysis, which allows one or more of the key issues highlighted in the netting reports - such as automatic early termination - to be compared across one or more jurisdictions.

Expected to be available in the fourth quarter of 2001, netalytics was developed by Allen & Overy, an international law firm, and will be offered to Isda members on a subscription basis. The netalytics website will contain all the netting opinions and updates commissioned by Isda, as well as additional information, such as an overview of the legal position with respect to netting and relevant original netting legislation.

Allen & Overy acts as US counsel, European counsel and Southeast Asian counsel to Isda. The group regularly advises on the development of new products and novel financing structures in the OTC derivatives and structured finance markets.

Jeffrey Golden, co-head of Allen & Overy's US law and derivatives practices, said: “We believe netalytics will complement Isda's efforts over the past years to ensure for its members the benefits and a clear understanding of netting as a risk management tool.”

Isda said it plans to discuss the initiative in Hong Kong on October 15 and Tokyo on October 18. The introduction of netalytics is the latest in a number of e-commerce initiatives by Isda. The association alreay offers an online facility that enables members to streamline the process of drafting, negotiating and executing agreements with counterparties and a library of interactive Isda documentation.