ISDA and Markit team to prepare dealers for Dodd-Frank
International Swaps and Derivatives Association (ISDA) has chosen Markit to
help deliver a technology solution to enable counterparties to amend their OTC
derivatives documentation in advance of Dodd-Frank requirements.
regulation requires amendments to the documentation or imposes compliance
requirements on market participants that must be satisfied by amending such
documentation. The number of counterparty master agreements – in excess of
10,000 – means that broker dealers face significant levels of legal and
administrative complexity and the potential for the duplication of efforts as
firms attempt to comply with the new rules.
is leading an industry-wide initiative to produce a series of amendments to
existing documentation and provide standardised counterparty questionnaires,
facilitated by an ISDA protocol. Unlike with previous ISDA protocols where
amendments were effected solely with delivery of an adherence letter, this protocol
will include additional bilateral delivery requirements as each party that
signs up must also deliver a completed questionnaire to each relevant
counterparty for the amendments and compliance to be effective. As a result of
these additional bilateral delivery requirements, ISDA sought to develop a
technology-based solution to automate the information-gathering process and
provide sharing of submitted data and documents to permissioned counterparties.
selection as the service provider for this initiative was the culmination of a
public request for proposals process.
and Markit expect to have an electronic questionnaire and reporting structure
operational by 1 August in order to facilitate compliance with Dodd-Frank
External Business Conduct rule October deadlines, with successive iterations
available prior to other regulatory implementation deadlines.
and Markit expect the solution to be enhanced to facilitate compliance with
regulatory requirements in other jurisdictions as they are finalised.
Reporting by Janet du Chenne, Global Custodian, an Asset International publication