This is rather interesting:

“The International Swaps and Derivatives Association (ISDA) has proposed a new reference data registry for standardized over-the-counter derivative contracts which would leverage the FpML standard to provide a basic description of the contracts and identification codes through their lifecycle.

The New York-based trade association for the $700 trillion market defined standardized OTC derivatives as those which are electronically executed or centrally cleared through a clearinghouse.

The registry, says ISDA, will simplify trade processing and reporting of OTC derivative contracts because financial firms can abstract the economics of the trade through reference data instead of having to specify them as part of each transaction.”

Comments are due on ISDA’s proposed derivative product registry (DPR) by May 8.

Hat tip Louise Story
>

Source:
ISDA Proposes Registry for Standardized OTC Derivatives
Chris Kentouris
Securities Technology Monitor, April 18, 2011
http://www.securitiestechnologymonitor.com/news/-27596-1.html

Category: Derivatives, Regulation

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4 Responses to “ISDA Proposal: Standardized OTC Derivatives”

  1. jhunt88 says:

    Interesting but they’ll need more than trade group support to get it done. I worked in a collateral group for a few months recently and there was little interest in automating these kinds of things, despite the fact that it would streamline both FO/MO/BO tasks, as well as transversal stuff like collateral and reconciliations. It’s alot like ISDA’s electronic messaging initiative; yeah, I can send an electronic message (AcadiaSoft is the vendor of choice atm), but I’m still going to manually input it into my systems (which is just DUMB). Bottom line, the big-wigs don’t want to spend the money, and the managers don’t want their power curtailed; electronic messaging plus wide acceptance of the above would see plenty of departments replaced by computers.

  2. AHodge says:

    beyond 88′s likely Luddite argument above…

    the big reason for no interest
    is they would have an obvious price mark valuation
    that both sides would have to keep applying to their own positions–maybe automated per 88?above?
    better to just do something OTC claim its too complicated to price all the time, and account any way they like.

    in any case all mortgage related has been 100% exempted from the exchange requirement.

  3. AHodge says:

    88
    i assume your collateral group has no interest in matching the price on either side of a deal?

  4. Francisco Bandres de Abarca says:

    And remove all that juicy leverage which can be acquired via the game of purchasing ‘insurance’ on margin? I dunno . . .