About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

ISDA Publishes 2011 Equity Derivatives Definitions

Subscribe to our newsletter

The International Swaps and Derivatives Association, Inc. (ISDA) announced today the publication of the 2011 ISDA Equity Derivatives Definitions. The Definitions represent a key development in the ongoing industry initiative to increase standardization and automation and further reduce risk across over-the-counter (OTC) derivatives markets.

The Definitions, published on July 8, include a Main Book and an Appendix, and are structured to allow for periodic updating. The Main Book contains the core definitions and provides a menu of provisions that can be combined to create different transactions. The Appendix to the Main Book contains tables setting out possible elections, consequences and fallbacks. The 2011 Definitions are drafted to be principles based, flexible and modular.

“The publication of the 2011 Equity Derivatives Definitions represents an important element in the derivative industry’s commitment to standardize these contracts, increase automation and electronic confirmations and to enhance transparency,” said Eric Litvack, ISDA Board Member, Chair of the ISDA Equity Derivatives Steering Committee and Managing Director, Société Générale. “The Definitions also supply a toolkit that takes into account market developments and provides flexibility for new products to be efficiently documented going forward.”

The 2011 Definitions were developed by four working groups of the 2011 Equity Definitions Drafting Committee, which comprises a global membership with representatives from both buy- and sell-side institutions. The Definitions are part of a new process and structure for documenting equity derivatives that will be implemented incrementally, initially via transaction matrices. In contrast to the 2002 ISDA Equity Derivatives Definitions, which were based upon a standard confirmation template for each of the three major transaction types (Swaps, Options, and Forwards), the 2011 Definitions confirmation structure is based upon a universal framework which is designed to support a unique set of core definitions.

Each transaction is a combination of unique terms, built on the same framework and may be documented, matched, and analyzed electronically. As next steps, market participants will create transaction matrices for US Index Variance Swaps and EU Index Variance Swaps by August 31. This will be followed by a review and plan of subsequent matrix products in October 2011.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: In data we trust – How to ensure high quality data to power AI

Artificial intelligence is increasingly powering financial institutions’ processes and workflows, encompassing all parts of the enterprise from front-office to the back-office. As organisations seek to gain a competitive edge, they are trialling the technology in variety of ways to streamline and empower multiple use cases. Some are further than others along the path to achieving...

BLOG

2024: A Year of Increasing Data Complexity

One thing was apparent in the data management space over the past year; the job of chief data officers became increasingly complex as the volume of data their organisations ingested swelled and the uses to which it was put expanded. All that despite the flowering of technologies with the potential to make life easier for...

EVENT

Data Management Summit New York City

Now in its 15th year the Data Management Summit NYC brings together the North American data management community to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Enterprise Data Management

The current financial crisis has highlighted that financial institutions do not have a sufficient handle on their data and has prompted many of these institutions to re-evaluate their approaches to data management. Moreover, the increased regulatory scrutiny of the financial services community during the past year has meant that data management has become a key...