Post by Sapphire Capital on Aug 3, 2008 2:45:10 GMT 4
Dealers Set New Derivatives Goals
By Ed Zwirn
August 1, 2008
A group of broker dealers and buyside institutions have agreed with the New York Federal Reserve to improve processing in the $50 trillion OTC derivatives market.
The 17 participants agreed to improve the prior DTCC matching and submission targets to DTCC on T+1, 90% to 92% matching at DTCC without modification, and 92% to 95% matching at DTCC by T+5 from 90% to 92% submission by the end of the year.
In addition, the dealers committed to immediately implement “a more aggressive target” whereby unconfirmed confirmations aged more than 30 calendar days are not to exceed one business day of trading volume, based on average daily volume in February, March and April 2008.
Also, by Dec. 31 all market participants will be required to submit and manage novation requests for electronically eligible trades via electronic processing platforms. After the end of the year, major dealers will not consent to proposed novations where the request is sent via email.
“These improvements to the derivatives infrastructure are important to strengthen the resiliency of the financial system,” said Timothy Geithner, New York Fed president.
Bank of America, JP Morgan Chase, Barclays Capital, Lehman Brothers, BNP Paribas, Merrill Lynch & Co., Citigroup, Morgan Stanley, Credit Suisse, The Royal Bank of Scotland Group, Deutsche Bank, Société Générale, Dresdner Kleinwort, UBS, Goldman, Sachs & Co., Wachovia Bank, HSBC Group, the International Swaps and Derivatives Association, Managed Funds Association Asset Management Group of the Securities Industry and Financial Markets Association signed the letter to the New York Fed.
"These efforts are consistent with ISDA's primary purpose, to encourage the prudent and efficient development of the privately negotiated derivatives business via the continued standardization of documentation, promotion of sound risk management practices and education of the marketplace," said Robert Pickel, executive director and chief executive officer of the International Swaps and Derivatives Association, Inc.
source: Marketsmedia Online
By Ed Zwirn
August 1, 2008
A group of broker dealers and buyside institutions have agreed with the New York Federal Reserve to improve processing in the $50 trillion OTC derivatives market.
The 17 participants agreed to improve the prior DTCC matching and submission targets to DTCC on T+1, 90% to 92% matching at DTCC without modification, and 92% to 95% matching at DTCC by T+5 from 90% to 92% submission by the end of the year.
In addition, the dealers committed to immediately implement “a more aggressive target” whereby unconfirmed confirmations aged more than 30 calendar days are not to exceed one business day of trading volume, based on average daily volume in February, March and April 2008.
Also, by Dec. 31 all market participants will be required to submit and manage novation requests for electronically eligible trades via electronic processing platforms. After the end of the year, major dealers will not consent to proposed novations where the request is sent via email.
“These improvements to the derivatives infrastructure are important to strengthen the resiliency of the financial system,” said Timothy Geithner, New York Fed president.
Bank of America, JP Morgan Chase, Barclays Capital, Lehman Brothers, BNP Paribas, Merrill Lynch & Co., Citigroup, Morgan Stanley, Credit Suisse, The Royal Bank of Scotland Group, Deutsche Bank, Société Générale, Dresdner Kleinwort, UBS, Goldman, Sachs & Co., Wachovia Bank, HSBC Group, the International Swaps and Derivatives Association, Managed Funds Association Asset Management Group of the Securities Industry and Financial Markets Association signed the letter to the New York Fed.
"These efforts are consistent with ISDA's primary purpose, to encourage the prudent and efficient development of the privately negotiated derivatives business via the continued standardization of documentation, promotion of sound risk management practices and education of the marketplace," said Robert Pickel, executive director and chief executive officer of the International Swaps and Derivatives Association, Inc.
source: Marketsmedia Online