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

JPMorgan Agrees to Provide ISDA with CDS Pricing Engine to Increase Transparency

Subscribe to our newsletter

JPMorgan has agreed to hand over its proprietary credit default swap (CDS) pricing engine to the International Swaps and Derivatives Association (ISDA) as an open source platform with a view to improving transparency in the market. It is hoped that this move will deter regulators from stepping in to regulate the sector, which has come under increased scrutiny over the last six months.

Last month, Colin Peterson, chairman of the US House of Representatives agriculture committee, proposed a draft bill under which CDS trading would be banned for investors that do not own the underlying bonds or loans of these derivatives. This proposal was widely condemned by the industry as a move that would end the trading of CDSs.

“This bill would increase the cost and reduce the availability of essential risk management tools while failing to address the true causes of the credit crisis,” explains Eraj Shirvani, ISDA chairman and head of European and Pacific credit sales and trading at Credit Suisse. “Throughout the crisis, CDSs have remained available and liquid. They have been the only means of hedging credit exposures or expressing a view at a critical time for the industry. Impairing their use would be counterproductive to efforts to return the credit markets to a healthy, functioning state.”

The decision by JPMorgan to make its CDS analytical engine, which was developed by its Quantitative Research group, available to the industry via ISDA is seen as a direct reaction to this legislative threat. The association will therefore make the technology available as an open source code in order to increase transparency around CDS pricing.

“JPMorgan has invested a lot of intellectual capital in this analytical engine. Its willingness to assign this to ISDA for us to make it available as open source to the entire industry demonstrates our collective commitment to the integrity of the CDS product,” says Robert Pickel, executive director and CEO of ISDA. “ISDA and its members are vigilant to public concerns around transparency. This is yet another measure of increased standardisation in CDS.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Multi-cloud environments – How to maximise data value while keeping on the right side of privacy and security

Multi-cloud environments have much to offer beyond single-vendor cloud setups, including the benefits of access to a variety of best-in-class cloud solutions, opportunities for price optimisation, greater flexibility and scalability, better risk management, and crucially, increased performance and availability. On the downside, multiple cloud vendors in a technology stack can cause complexity, more vulnerabilities, and...

BLOG

SimCorp Integrates Clarity AI Sustainability Data into Investment Management Platform

SimCorp, currently the subject of an all-cash offer from Deutsche Börse, has integrated Clarity AI’s sustainability datasets into its investment management platform providing institutional investors with access to AI-powered datasets that will help them align with EU sustainable finance regulations and execute impact investing strategies. Clarity AI uses machine learning and big data to deliver...

EVENT

Data Management Summit New York City

Now in its 14th 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

Regulatory Data Handbook 2023 – Eleventh Edition

Welcome to the eleventh edition of A-Team Group’s Regulatory Data Handbook, a popular publication that covers new regulations in capital markets, tracks regulatory change, and provides advice on the data, data management and implementation requirements of more than 30 regulations across UK, European, US and Asia-Pacific capital markets. This edition of the handbook includes new...