Interest Rate, Currency Definitions To Get Spruced Up
The 2000 International Swaps and Derivatives Association definitions for interest rate and currency derivatives will be updated next year.
The 2000 International Swaps and Derivatives Association definitions for interest rate and currency derivatives will be updated next year. Don Thompson, assistant general counsel at JPMorgan in New York and co-chair of ISDA's North America documentation committee, explained that since the definitions were written many new floating-rate indices have been put out. "There have been lots of quirky floating rates, especially in the European markets," he said, citing overnight interest rate swap rates as an example.
While ISDA could publish amendments, enough new material has been generated to warrant the production of a new definitions booklet, Thompson said. "It's just to ease the operational flow for confirmations."
The revision will probably take a full year, according to Kimberly Summe, general counsel in New York. She said the trade association has started the process by distributing a survey to assess the range of topics which should be considered. It will receive feedback in January.
ISDA has been updating its annex to the 2000 definitions electronically over the past two years and the 20 amendments made so far will be folded into the new annex.