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Isda Seeks Green Light on Margin Model

By Philip Stafford
Published September 26, 2014 Financial Times

Derivatives markets participants are expecting to receive the green light from regulators to develop an industry initiative designed to head off potential pricing confusion as new rules come into force.

The International Swaps and Derivatives Association, an industry trade body, said this week it had finalised a standard model to calculate the margin needed to back trades that would not be processed by clearing houses.

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Trillions Saved as Swaps Margining Standards Agreed

By Christopher Whittall
Published September 25, 2014 IFR

The derivatives industry has taken a major step towards harmonising margining standards across the market, in a move that will slash the amount of high-grade collateral needed to be held against uncleared swaps under beefed up regulatory standards by trillions of dollars.

The International Swaps and Derivatives Association announced at its European conference this week that industry participants had reached an agreement on a basic methodology for a standardised initial margin model (SIMM), while warning that the regulatory timetable for introducing IM requirements next year is overly aggressive.

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Sef Boss Spends His Days ‘Worrying About Costs’

By Catherine Contiguglia
Published September 24, 2014 Risk

With competition fierce and volumes continuing to disappoint, it is no fun running a swap execution facility (Sef) at the moment, attendees at the International Swaps and Derivatives Association's European regional conference were told yesterday.

"I spend most of my day worrying about costs, writing cheques for costs and wondering where the revenue is," said Krishan Singh, head of Ice Swap Trade, speaking at the Isda conference. "We saw it as a business opportunity, and since then it has become clear it is something – obviously from an execution-only point of view – that is never going to be a standalone business."

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Elusive SEF CLOB Liquidity Begins to Build

By Helen Bartholomew 
Published September 23, 2014 IFR Asia

Originally aimed at increasing efficiency and transparency, while creating a level playing field for buyside and sellside firms, the Dodd-Frank Act mandates the most liquid swaps for trading on newly-created swap execution facilities. But, so far, liquidity in central limit order books has been slow to build, leaving the market looking little-changed for some participants, who still have to rely on request for quote protocols to execute trades.

“I’m surprised by the lack of pick-up in central limit order books for liquid swaps,” said Michael O’Brien, director of global trading at buyside firm, Eaton Vance, speaking at ISDA’s annual European conference in London earlier today.

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Global Repository Plan ‘a Dream’, Says Isda CEO

By Philip Stafford
Published September 24, 2014 Financial Times

A plan to create a centralised mechanism for the world’s global over-the-counter-derivatives data has been called “a dream” by the industry’s main trade association.

Scott O’Malia, new chief executive of the International Swaps and Derivatives Association, said a recommendation by the Financial Stability Board to create a centralised utility for regulators to share data was “a nice vision for the future but the reality is dealing with what we have today and making that work”.

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CDS-OVERHAUL/ISDA-Volatility Likely for Delayed CDS Rebirth

By Christopher Whittall
Published September 22, 2014 Reuters/IFR

The rebirth of the US$21trn credit default swap market will be delayed by two weeks, Markit and ISDA confirmed last week, in a sign that the industry is struggling to get ready for the most substantial overhaul to CDS in over five years.

Markit said the first day of trading on the new series of its CDX and iTraxx CDS indices under the new documentation - which aims to restore faith in the instruments - would take place on October 6 rather than September 22 as originally slated.

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ISDA Delays Overhaul of $18 Trillion Derivatives: Credit Markets

By Abigail Moses
Published September 18, 2014 Bloomberg

The International Swaps & Derivatives Association said it postponed the biggest overhaul to the $18 trillion credit derivatives market in more than a decade to give investors more time to prepare for the changes.

New rules governing credit-default swaps will take effect Oct. 6 rather than Sept. 22, ISDA said in a statement yesterday. The changes seek to fix flaws in sovereign and bank insurance that prevented some contracts from paying out as intended since the financial crisis.

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Markit Mulls Delay to Derivative Index Change to Match New Rules

By Abigail Moses
Published September 16, 2014 Bloomberg

Trading of new credit-default swap indexes may be delayed to coincide with changes to rules governing the insurance contracts, according to Markit Group Ltd.

New benchmarks may be postponed to Oct. 6 from Sept. 22, the index administrator said in a statement on its website. Indexes are updated every six months when companies are added or dropped depending on their ratings, cost of protection and ease of trading.

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DERIVATIVES: Swaps Fragmentation Begins to Subside

By Mike Kentz
Published September 11, 2014 IFR Asia

The fragmentation of liquidity in certain over-the-counter swaps contracts across national borders may finally be subsiding, a year after Dodd-Frank regulations first pushed European market participants away from their US counterparts.

International clients are slowly beginning to warm to the idea of trading on swap execution facilities after having avoided the platforms for the past year, according to platform operators. 

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CDS Notional Begins Increase Following Sizeable Slump

By Beth Shah
Published September 11, 2014 Global Capital

Overall credit default swap notional reported to swap data repositories last week increased 33% from the previous week, according to data from the International Swaps Derivatives Association.

This follows two weeks of falling volumes with a combined decrease of 57%. Overall interest rate derivatives that was reported, also increased by 18%.

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