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: Streamlining trading and investment processes with data standards and identifiers

Financial institutions are integrating not only greater volumes of data for use across their organisation but also more varieties of data. As well, that data is being applied to more use cases than ever before, especially regulatory compliance and ESG integration. Due to this increased complexity of institutions’ data needs, however, information often arrives into...

BLOG

Data Standards Bring Many Gains (If You Have the Right Setup): Webinar Review

Standards and identifiers are helping to improve the quality of data used by capital market participants, but organisations with legacy architectures are finding it challenging to capitalise on those benefits, according to polls by A-Team Group. Half of respondents to surveys held during a recent A-Team Group Data Management Insight webinar said that data standardisation...

EVENT

TradingTech Summit London

Now in its 14th year the TradingTech Summit London brings together the European trading technology capital markets industry and examines the latest changes and innovations in trading technology and explores how technology is being deployed to create an edge in sell side and buy side capital markets financial institutions.

GUIDE

MiFID II Handbook – Second Edition

With the compliance deadline for Markets in Financial Instruments Directive II (MiFID II) just over two months away, A-Team Group has updated its MiFID II handbook to bring you the latest details on the regulation’s compliance requirements. Version 2 of the handbook, commissioned by Thomson Reuters, also includes new sections covering data sourcing and data...