The International Swaps and Derivatives Association plans to take the next step in revising its original credit derivatives definitions, which date back to 1999. The trade body has sent out the new definitions in draft form and plans to hold a video conference on Monday. Credit derivatives officials said the definitions are being revised to consolidate supplements, such as convertible deliverability, and to tighten up some of the technical language, both of which would make credit derivatives a more efficient product.
Even with some of the recent supplements, "there are bits [in the draft] that need improving. Right now you're restricted in what types of bonds you can deliver and there could be some problems with certain types of exchangeables and zeroes," said one derivatives professional, adding the issue of dispute resolution will also be key.
Kimberly Summe, general counsel at ISDA in New York, was travelling and unavailable for comment and Louise Marshall, policy director in New York, did not return calls.
Click here to download the draft in PDF format.