On May 23, ISDA published a discussion paper on the purposes, function and issues associated with central clearing of over-the-counter (OTC) derivatives. ISDA Release.
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ISDA Market Practice Statement on Variance Swaps
On April 5, ISDA announced a market practice statement on short sale price limitations triggered under Regulation SHO Rule 201 for U.S. share and index variance swaps. ISDA Statement.
ISDA Seeks Establishment of Commodity Derivatives Trade Repository
On March 25, ISDA issued a request for proposals to establish a Commodity OTC Derivatives Trade Repository that would: (i) meet all current and future regulations governing repositories and (ii) provide a structure to rapidly report and provide timely access to information to applicable regulators. Proposals from interested providers must be submitted by April 25. ISDA Release.
ISDA Reacts to LBIE Judgment
On December 21, ISDA announced that it sought and was granted permission to intervene in the Lehman Brothers International Europe case in order to ensure that the arguments reflecting the market’s interpretation of Section 2(a)(iii) of the ISDA Master Agreement were made before the court. The court agreed with ISDA that Section 2(a)(iii) is “suspensive” in effect. ISDA Release.
ISDA Asia Pacific Portfolio Reconciliation MoU
On January 3, ISDA published the Asia Pacific Portfolio Reconciliation Memorandum of Understanding outlining the process and frequency for reconciling portfolios of collateralized derivatives transactions used by participating firms in that region. ISDA Release.
ISDA Releases Two Transparency Studies
On December 8, ISDA published two studies on transparency in the OTC derivatives industry with respect to credit default swaps and interest rates swaps. The studies highlight the spectrum of methods that can be used to increase transparency while analyzing the benefits and costs of doing so. ISDA Release.
ISDA Publishes OTC Derivatives Best Practices
On October 26, ISDA published two best practice documents: the OTC Derivatives Settlements Best Practice and the OTC Derivatives Interest Compensation Claims Best Practice. ISDA Release.
ISDA Streamlines Credit Derivative Novation Process
On August 25, ISDA published ‘Additional Provisions for Consent to, Confirmation of, Transfer by Novation of OTC Derivative Transactions’. The provisions amend the novation protocol and provide for further streamlining of the process for novating or assigning credit derivative trades as part of ISDA’s ‘Credit Consent Equals Confirmation Project’. The project goes live on September 30. ISDA Release.
ISDA Publishes HIRE Act Protocol
On August 23, ISDA published the 2010 HIRE Act Protocol, which addresses the changes in law effected by the HIRE Act, enacted on March 18. The HIRE Act could impose U.S. withholding tax on payments under an equity swap that are determined in part based on dividend payments on a referenced U.S. equity security. The HIRE Act provisions generally are effective on any swap after September 14, regardless of when the swap was entered into. The protocol (i) eliminates the normal gross-up that would apply for withholding tax purposes, (ii) allows for termination of a swap if payments become subject to withholding under the HIRE Act provisions, and (iii) amends payee representations to account for the HIRE Act. ISDA Release.
See Orrick’s Financial Markets Alert of April 1, 2010 for additional background regarding the HIRE Act.
ISDA Publishes Best Practices for OTC Derivatives Collateral Process
On June 30, ISDA published Best Practices for the OTC Derivatives Collateral Process. The Best Practices focuses on OTC derivative trades collateralized on a bi-lateral basis under the ISDA English and New York law Credit Support Annexes and English Law Credit Support Deed agreed between two parties. Release.