ISDA 200

200 

ISDA ® 

9International Swaps and Derivatives Association, Inc.

ISDA® 2009 

A Yearbook of ISDA Activities 

International Swaps and Derivatives Association, Inc.

OFFICES 

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Phone: (212) 901-6000 

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United Kingdom 

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BRUSSELS 

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TABLE OF CONTENTS 

FOREWORD 1 

DOCUMENTATION PROJECTS SUMMARY 6 

PRODUCTS & USERS 11 

CDS Hardwiring 11 

Interest Rates 13 

Natural Catastrophe Swaps 15 

Derivatives Users Committee 16 

Equity Derivatives 17 

Energy, Commodities & Developing Products 19 

Japan Property Derivatives 20 

INFRASTRUCTURE 21 

Portfolio Compression & Market Practice Changes 21 

Collateral 23 

Operational Scalability 25 

FpML 27 

SUPERVISION 29 

Accounting 29 

Fair Value Accounting 31 

EU Savings Tax Directive 32 

Financial Law Reform 33 

Public Policy - US 35 

Public Policy - EU 37 

Public Policy - EMEA Emerging Markets 39 

Public Policy - APAC 41 

Public Policy - Japan 43 

EDUCATION & OUTREACH 45 

Research 45 

Membership 48 

Current Members 50 

ISDA Conferences & Events 2008 59 

iii

INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC. 

2009 BOARD OF DIRECTORS 

Eraj Shirvani, Chairman 

Managing Director, Head of Fixed Income 

for EMEA Region 

Credit Suisse 

Officers 

Diane Genova, Treasurer 

Managing Director and General Counsel, 

Investment Bank 

J.P. Morgan Chase & Company 

Michele Faissola, Vice Chairman 

Managing Director and Global Head of 

Rates, Global Markets Division 

Deutsche Bank 

Directors 

Thibaut de Roux 

Global Head of Structured Rates and 

Equity Products 

HSBC Bank plc 

Nitin Gulabani 

Global Head of Rates 

Standard Chartered Bank 

George Handjinicolaou 

Deputy CEO 

ISDA 

Alan Haywood 

Head of Oil Supply & Trading 

BP OIL International 

Peter Healey 

Managing Director 

UBS Investment Bank 

Frédéric Janbon 

Global Head of Fixed Income 

BNP Paribas 

Dixit Joshi 

Managing Director: Head of Equities, 

EMEA and Asia Pacific 

Barclays Capital 

Pierre-Emmanuel Juillard 

Head of Structured Finance Division 

AXA Investment Managers 

Sotaro Kato 

Managing Director, Co-Head of Fixed Income Division 

Nomura Securities International, Inc 

Ted MacDonald 

Managing Director and Treasurer 

The D. E. Shaw group 

Stephen O’Connor 


Morgan Stanley 

Robert Pickel 

Chief Executive Officer 

ISDA 

Bill Powers 


PIMCO 

Riccardo Rebonato 

Global Head of GBM Market Risk and 

Head Analytics 

Royal Bank of Scotland 

Thomas Riggs 


Goldman Sachs 

Gerhard Seebacher 

Managing Director, Head of Global Credit 

Products 

Bank of America 

Atsushi Takahashi 

General Manager of Derivative Products 

Division 

Mizuho Corporate Bank, Ltd. 

Lili Wang 

Senior Executive Vice President 

ICBC Ltd. 

Eric Litvack 

Managing Director, Global COO 

Volatility Trading 

Société Générale

FOREWORD 

As you are well aware, 2008 was a year of significant turmoil and volatility in the global financial 

markets. Over-extension of, and over-exposure to, subprime credit significantly eroded capital and 

confidence in the financial industry. Changes within the industry—in terms of mergers, acquisitions 

and failures—occurred at a scope and scale that can only be described as historic. 

Through it all, how has the privately negotiated derivatives business fared? 

The answer to this question comes in two parts. The first is that the derivatives business—and in particular 

the credit default swaps business—functioned very effectively during extremely difficult market 

conditions. CDS have proven to be the main (and sometimes only) way for industry participants to 

shed risk or express a credit market view. In addition, CDS contracts have been consistently more 

liquid than their cash equivalents. While many cash, securities and money markets seized up, the 

CDS business continued to operate. 

Of particular note is how well the CDS business performed in relation to the several large defaults 

that occurred in the span of just a few weeks last autumn. We can take great pride knowing that the 

significant amount of time and energy that ISDA and the industry expended to build a robust, resilient 

infrastructure has clearly been worth the effort. Default and settlement processes were handled 

efficiently. In addition, the actual amounts exchanged upon settlement—and the risks of the relevant 

CDS positions—were far below reported projections. Figures are available from the Depository Trust 

& Clearing Corporation’s Trade Information Warehouse. 

The second part of the story, however, is more trying for the industry. Clearly, there is a great deal 

of misunderstanding and misperception regarding the role and benefits of CDS. Our focus as the 

industry standard-bearer is to address and counter these inaccuracies. For the past 25 years, ISDA 

has worked to improve the efficiency and transparency of the bilateral derivatives business, with 

continued standardization of documentation, promotion of sound risk management practices and 

education of the marketplace. 

ISDA’s robust legal and operational infrastructure provides certainty for the derivatives industry in a 

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time of economic volatility. To name but a few of our initiatives: we work with regulators, legislators 

and the media to strengthen the operational infrastructure for and understanding of OTC 

derivatives that guides market participants through defaults and credit events. We organize 

global conferences to promote awareness of industry commitments on operational matters. 

We publish Master Confirmation Agreements to harmonize equity derivative transaction and 

trade processing. 

Recent developments in the financial markets underscore the value of ISDA and the industry’s 

collective efforts. Together with its members and other industry groups, ISDA has worked extensively 

with a New York Fed-led group of regulators to improve derivative market processing 

and scalability, as well as augment risk mitigation and transparency. 

One of ISDA’s key initiatives in 2009 is the completion of a successful cash settlement auctionbased 

mechanism, a process which has been commonly referred to as “hardwiring”. Working 

side-by-side with ISDA’s protocol amendment process, the auction mechanism played an important 

role in providing market participants an efficient and reliable settlement process through 

major credit events in 2008. The incorporation of auction settlement terms into standard CDS 

documentation was commended by the Senior Supervisors Group of regulators and separately 

by the New York Fed. 

ISDA works closely with the industry to improve the OTC processing environment by significantly 

reducing systemic risk and increasing transparency. The Association continues to support 

initiatives and platforms that operate to eliminate economically redundant trades through 

portfolio compression and tear-ups. 

The success of ISDA’s CDS settlement auctions and other strategic steps that ISDA is making 

towards operational efficiency clearly demonstrate that the industry infrastructure for CDS 

works. 

2008 Year in Review 

As we entered 2008, we did so with new leadership. At the Association’s 23rd Annual General 

Meeting, ISDA welcomed Eraj Shirvani, Managing Director, Head of European and Pacific 

Credit Sales and Trading at Credit Suisse, as its new Chairman. ISDA was very pleased to 

have Eraj take on this role to help lead ISDA through the fresh challenges and opportunities 

ahead. 

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Eraj replaced Jonathan Moulds, President, Europe, Middle East, Africa (EMEA) and Asia, Bank 

of America, who had served as ISDA Chairman since November 2004. We at ISDA deeply 

appreciate Jonathan’s leadership and his efforts on behalf of the derivatives industry over the 

years. 

The past year posed a range of challenging issues for the Association that demonstrated the 

commitment of ISDA members, Board and staff around the world. During 2008, ISDA added 

100 new members, bringing our total membership to over 820 firms from 57 countries on six 

continents. The breadth and scope of ISDA’s membership, coupled with the expertise and talent 

its members bring to industry issues, are largely responsible for our continuing success in 

representing the global derivatives business. 

As ISDA’s Mid-Year 2008 Market Survey highlighted, the derivatives business overall showed 

consistent growth over the first half of 2008. However, the industry began to see a downturn in 

the notional volumes of credit derivatives—the total amount of trades that are outstanding. This 

decrease primarily reflects the industry’s efforts to reduce risk by tearing up economically offsetting 

transactions, and demonstrates the industry’s ongoing commitment to reduce risk and 

enhance operational efficiency. 

ISDA remains focused on building a strong operational infrastructure to support the continued 

growth in this important market. The results of this year’s Operations Benchmarking Survey are 

of particular interest because of increased attention to such issues from the industry and policy 

makers. According to the Survey, post-trade processing has kept pace with industry growth and 

in many cases improved over the years. 

In the area of documentation, we published a revised version of the (single-name) Standard 

Terms Supplement for Use with Credit Derivative Transactions on Leveraged Loans. This template 

has been updated to include auction settlement on the same terms as the index version, 

providing consistency for those entering into single-name loan CDS trades on reference obligations 

that are listed in the index. 

The Collateral Committee worked closely with major dealers to identify improvements in collateral 

management, including portfolio-reconciliation best practices. The Committee continued 

facilitating the use of collateral amongst industry participants, particularly outside of the US. In 

Europe, ISDA proposed harmonization of netting laws and in Japan, the 1995 ISDA Credit Support 

Annex was revised to reflect changes in legislation. 

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Our 2008 Margin Survey reflected the continued importance of collateralization as a risk mitigation 

tool and the effectiveness of collateral agreements. The Survey estimated that the collateral 

in circulation was $2.1 trillion, a 60% increase over 2007. The Survey also reported that collateral 

agreements in place grew to over 149,000, an 18% increase from 2007. 

Year in and year out, ISDA increases the number of netting and collateral opinions in response to 

the needs of our members. ISDA currently has 53 netting and 43 collateral opinions, for a total of 

96 opinions. We have a steady pipeline of requests for new opinions. 

In 2008, ISDA participated in extensive discussions with various groups on risk management 

practices. ISDA endorsed the President’s Working Group on Financial Markets’ (PWG) call for 

the adoption of best practices with respect to risk management for OTC derivatives activities, 

including public reporting, liquidity management, senior management oversight and counterparty 

credit risk management. PWG’s initiatives also include the use of legally-enforceable netting and 

collateral agreements between counterparties where possible. 

Additionally, ISDA, the International Association of Credit Portfolio Managers (IACPM), the Risk 

Management Association (RMA) and McKinsey & Company conducted the Survey on Credit 

Portfolio Practices. The industry’s interest in the Survey reinforces the importance of strengthening 

the portfolio management function during a credit crisis. 

Throughout the year, ISDA continued to broaden our educational efforts and reach to industry 

participants around the world. We launched ISDA ON DEMAND ® , an online service that enables 

industry participants to access the Association’s conference programs over the Internet at their 

convenience. ISDA ON DEMAND is the only source for e-learning that provides participants with 

the relevant ISDA training and educational materials. 

2008 was another year of growth for ISDA conferences. In all, ISDA held 143 events throughout 

2008. These include our Regional Member Conferences in Sydney, Hong Kong and Tokyo, and 

symposiums and training courses on subjects that ranged from risk management and new types 

and uses of derivatives to the latest developments across the industry. 

The Association’s 2008 Annual General Meeting in Vienna, Austria, which featured leading 

speakers from the industry, government and academia, was well attended. ISDA’s April 2009 

AGM in Beijing, China will again bring together key players to consider the important role that 

derivatives play in the global economy. 

4

Looking Ahead 

There’s no question that the turmoil in the global financial markets has brought significant challenges 

to the privately negotiated derivatives business. We pledge to operate as efficiently and 

effectively as possible so that our members realize the maximum value for their contributions to 

the Association. Initiatives to reduce or eliminate unnecessary expenses are well underway. 

I thank you for your continued involvement in the many initiatives of our Association. With your 

support, ISDA will continue to work to fulfill its mission and bring significant value to our industry 

and our members. 

Sincerely, 

Robert Pickel 

Executive Director and Chief Executive Officer 

5

Documentation 

Projects Summary 

Key Achievements of 2008, Highlights for 2009 

In the challenging macro financial market environment of 2008, the derivatives industry continued to 

function well and provide important risk management avenues for market participants. Against this backdrop, 

a series of high profile corporations failed and along with that came a number of significant credit 

events for ISDA and its members to address. The mechanisms to deal with these events functioned 

smoothly and successfully and, contrary to the expectations of some pundits, settlements were completed 

efficiently and in smaller amounts than some sensationalized reports indicated. 

Credit Derivatives 

ISDA conducted 13 settlement auctions over the course of 2008, relating to 8 CDS protocols, notably 

including Lehman Brothers, Fannie Mae and Freddie Mac, Washington Mutual and the first Europeanbased 

credit event-driven protocols for three Icelandic banks. Each of these auctions was conducted as 

seamlessly as those that had preceded them since 2005. 

A major part of any credit event process going forward will be the hardwiring of the settlement protocol 

process, which facilitates the cash settlement of CDS following a credit event, but which eliminates the 

need for individual protocols. This was a major focus in the latter part of 2008 and is perhaps the single 

documentation effort to which the Association and its members are currently devoting the most attention 

and resources. Hardwiring for new trades is detailed in the Auction Settlement Supplement to the ISDA 

Credit Derivatives Definitions. In order to bring existing trades under the same terms, the Big Bang Protocol 

lets participants amend trades multilaterally with all other adhering counterparties. 

Other key credit derivative projects completed in 2008 include European LCDS, and North American 

CDS and LCDS documentation. ISDA expects to revisit its Credit Derivatives Definitions to incorporate 

these and other changes in 2009. 

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Close-out Protocol and Netting 

The 2009 Close-out Protocol allows firms to agree multilaterally to amend the terms of their documentation 

so that in the event of a counterparty failure, the agreed method of determining prices is by Close- 

Out Amount. This is a flexible means for market participants to establish reasonable prices by consulting 

a range of sources. 

In Asia, working toward Close-out Netting for China will be a major focus for the Association, including 

proposed amendments to China’s Bankruptcy Act, as well as continued work with regulators on a unified 

Master Agreement for onshore derivatives trades. Ongoing work on Close-out Netting for Malaysia will 

also continue to be a significant aspect of ISDA’s work in the region. 

Equity Derivatives 

The AEJ (Asia Ex-Japan) Master Equity Confirmation Agreement, published in August 2008, contains 

the following annexes: EFS Annex, which documents cash-settled equity finance share swaps; the Multiple 

Exchange Index Annex; and an Open Market Annex OMISO, which documents cash and physically-settled 

European and American style index and share options. All of the annexes to this agreement 

reference underlying shares or indices in Australia, Hong Kong, New Zealand or Singapore. 

Revised Additional Provisions for Use with Indian Underliers were published in November, making 

changes to the original version published in 2005. The changes take into account amendments made to 

the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations from May. 

The 2008 Japanese Master Equity Derivatives Confirmation Agreement is designed to document cashsettled 

index option transactions, and cash or physically-settled share option transactions. The 2008 

Japanese Dividend Swap Master Confirmation Agreement (Annex IDS) documents index dividend swap 

transactions, and is ISDA’s first dividend swap agreement. 

The 2008 Americas Master Designated/Exchange-Traded Contract Option Confirmation Agreement, 

published in March, is intended to document physically-settled share option transactions and cash-set- 

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tled index option transactions on US underliers. 

For 2009, ISDA is working on documentation projects to standardize interdealer share and index swap 

documentation for Asia ex-Japan, Europe and Japan, as well as emerging market options documentation 

for AEJ closed markets and emerging Europe. Also, we expect to publish share basket and index 

basket option documentation for each equity region. 

Interest Rate Derivatives 

In 2008, along with the publication of numerous Floating Rate Options, including OIS based Floating 

Rate Options, ISDA published a confirmation template for CMS One Look Transactions as well as standard 

language addressing Deliverable Currency Disruptions. ISDA is working with members to revise 

the Deliverable Currency Disruption Fallback Matrix to increase the number of currencies covered. 

ISDA will be introducing a standardized biannual process to incorporate new Floating Rate Options in 

2009. 

Energy, Commodities and Developing Products 

ISDA will be working with members to update the Commodity Reference Price sections of the 2005 ISDA 

Commodity Definitions as well as expanding the suite of templates for weather transactions. Also ongoing 

is the expansion of products covered by the ISDA US Emissions Annex. 

For the ISDA Global Physical Coal Annex, an updated version of the draft confirmation template is underway. 

In relation to the ISDA US Crude Oil & Refined Products Annex, a draft addendum for Canadian 

transactions is currently under review by local counsel. 

The Catastrophe Swap Working Group is finalizing a Wind Event Confirmation for use with the 2006 

Definitions. Further natural catastrophe swap documentation compatible with the ISDA framework is 

contemplated. 

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Other Areas 

The final draft of the widely anticipated Islamic version of the ISDA Master Agreement (ISDA/IIFM 

Ta’Hawwut (Hedging) Master Agreement) has been circulated to the IIFM Board of Shariah Scholars for 

final approval. A document of cultural and commercial significance, the Islamic Master Agreement will be 

the first industry standard document for the framework documentation of privately negotiated derivatives 

that complies with Shariah law. Once the Islamic Master Agreement is published, ISDA will start work on 

producing individual confirmation forms for specific product use with the framework document. 

ISDA acted as an Amicus Curiae—or friend of the court—in several cases during 2008, most notably TCIF 

vs CSX, and will continue to provide this resource in any cases that require derivatives industry expertise 

and input that any arising court cases might require. 

ISDA LEGAL: 

David Geen 

General Counsel 

DGeen@isda.org 

Katherine Darras 

General Counsel, Americas 

KDarras@isda.org 

Jacqueline Low 

Senior Counsel, Asia Pacific 

JLow@isda.org 

Jing Gu 

Assistant General Counsel, Asia Pacific 

JGu@isda.org 

Rosario Chiarenza 

Counsel 

RChiarenza@isda.org 

Kirsty Devonport 

Counsel 

KDevonport@isda.org 

Mark New 

Assistant General Counsel 

MNew@isda.org 

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Products & Users 

CDS Hardwiring 


In March 2009, ISDA launched its Auction Settlement Supplement and Protocol, the final stage of 

the process known as “hardwiring.” This incorporates auction settlement terms into standard CDS 

documentation, and has been welcomed by the Senior Supervisors Group of regulators as well as 

by the New York Fed as a tool to reduce uncertainty and make credit event management more operationally 

efficient. 

The event is a milestone in the ongoing refinement 

of practices and processes for the efficient, 

liquid and transparent conduct of the CDS business. 

Hardwiring is central to the many improvements 

ISDA and the industry are making to the 

CDS contract, to further ensure that infrastructure 

and standards for these important risk management 

instruments are straightforward, secure 

and widely implemented. 

and commitment that both buy-side and sell-side 

participants and the regulatory community have 

invested in this process. Key attributes include: 

incorporation into the standard documentation 

of Auction Settlement provisions that eliminate 

the need for credit event protocols; Resolutions 

of the Determinations Committees, comprising 

dealer and buy-side representatives to determine, 

for example, whether credit events have 

In recognizing the benefits hardwiring will bring, 

we must also recognize the insight, hard work 

taken place; Credit and Succession Event Backstop 

Dates that institute a common standard effective 

date for CDS trades. 

11

In combination with the changes in market practice that support standard coupons for CDS, these developments 

will introduce greater certainty to transactional, operational and risk considerations for treatment 

of CDS. 

CONTACT: 

David Geen 

General Counsel 

DGeen@isda.org 

Mark New 

Assistant General Counsel 

MNew@isda.org 

Kirsty Devonport 

Counsel 

KDevonport@isda.org 

Source: Markit Quarterly Trend Report, December 2008 

12


Interest Rates 


Working in conjunction with Association members, ISDA’s legal and documentation activities 

in the Interest Rate and Currency Derivatives space covered a range of issues and 

regions. We would like to highlight a few of our new publications and how they further the 

derivative industry’s objectives. 

Additional Provisions For Use With a Deliverable 

Currency Disruption (Additional Provisions) and 

ISDA Deliverable Currency Disruption Fallback 

together under the auspices of ISDA, to proactively 

tackle issues that could lead to operational 

inefficiencies if left unaddressed. 

Matrix (Fallback Matrix), were published by ISDA 

in November. These address the processing of 

a payment stream denominated in a currency 

that at the inception of a transaction was convertible 

but has subsequently become inconvertible. 

ISDA is working with Association members to 

increase the number of currencies covered by 

the Additional Provisions and Fallback Matrix on 

a continuing basis. These documents exemplify 

the commitment of market participants, working 

Responding to member feedback, and in coordination 

with the Interest Rate Operations Working 

Group, ISDA published numerous supplements 

to the 2006 ISDA Definitions during 2008. One 

key development was Exhibit II-J, Additional Provisions 

for a Confirmation of a Constant Maturity 

Swaps One Look Transaction. This template illustrates 

ISDA’s continuing efforts to reduce documentation 

risk—a core ISDA objective—by pub- 

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lishing standard transaction confirmations. ISDA will continue to work closely with market participants to 

identify suitable transactions for standard confirmation templates. 

The 2008 Inflation Definitions also reflects ISDA’s global reach and commitment to standardization. 

Drawing comments from five continents, the Inflation Definitions greatly expanded the list of available 

Index Descriptions. This expanded menu promotes the standardization of inflation trades, by allowing 

parties to reference a defined index as opposed to bilaterally defining an index. 

CONTACT: 


Counsel 



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Natural 

Catastrophe Swaps 


Rapid product innovation and standardization of product documentation are hallmarks of the 

over-the-counter derivatives industry. At last year’s Annual General Meeting in Vienna, Natural 

Catastrophe Swaps, particularly US Wind Event and US Earthquake Event Swaps, were 

identified as important developing products. Documentation for many of these products begins as bespoke 

derivatives contracts and as the market matures, ISDA works with Association members to forge 

standard confirmations. 

Drawing Association members from a wide range 

of backgrounds—for example, re-insurers, dealers 

and end-users—ISDA formed the Catastrophe 

Swap Working Group to begin working on 

standardization. The working group decided to 

concentrate efforts on developing a standard 

US Wind Event confirmation and then expand to 

other Natural Catastrophe products. 

At the time of publication, the US Wind Event Confirmation 

was due for finalization. The US Wind 

Event Confirmation project is a fine illustration 

of how Association members, working through 

ISDA, can transform a relatively bespoke, illiquid 

product into a commoditized, liquid product. 

Building on the success of the Working Group, 

ISDA plans to tackle other Natural Catastrophe 

Among the many key points addressed by the 

Swaps, including US Earthquake Event confirmations, 

in the near term. 

Working Group was the length of the period to 

determine the occurrence of a loss trigger event 

(called the US Wind Event), and appropriate extension 

thresholds. The group has provided a 

menu of possible US Wind Event terms, allowing 

CONTACT: 


Counsel 


for greater customization of the swap, while still 

benefitting from standardized documentation. 

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Derivatives users 

committee 

It is the impetus of customer trades that determines not just where prices go, but which types of 

contracts develop. With that in mind, the Derivatives Users Committee remains a vital part of ISDA’s 

engagement with the full range of participants in privately negotiated derivative contracts. 

ISDA has long recognized the importance of the 

buy side in its membership structure, with the 

part of the “hardwiring” of new settlement procedures 

in credit derivatives. 

“Subscriber” category constituting a healthy third 

of the total number of member firms. But the Association 

went a step further in 2008, adding three 

new buy-side positions at Board level, to diversify 

member representation at senior levels, and to 

better serve the needs of all ISDA members. 

The three new Board members are: 

• Pierre-Emmanuel Juillard, Head (and founder) 

of Structured Finance Division, AXA Investment 

Managers 

While these moves clearly underline the role of 

investment firms in OTC derivatives, ISDA will 

continue to seek out the views of all constituencies 

within the end-customer base. The use of 

interest rate swaps and currency derivatives continues 

to grow and, with government deficits rising, 

the many national debt management offices 

in ISDA’s membership appear likely to become 

more active. 

• Ted MacDonald, Managing Director, DE Shaw 

group 

• Bill Powers, Managing Director and Member, 

PIMCO Investment Committee. 

CONTACT: 

Richard Metcalfe 

Global Head of Policy 

RMetcalfe@isda.org 

Separately, the Association has recognised the 

end-user contribution to market practice, in the 

structure of the Determinations Committee that is 

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Equity Derivatives 


In 2009, ISDA is focusing on standardizing equity derivatives documentation to facilitate electronic 

trade processing. ISDA has committed, in various regulatory submissions, to assisting the industry 

in its move to electronic trade processing by standardizing the underlying trade documentation. The 

current industry commitments for new master confirmation agreements are to be completed by the end 

of June 2009. 

For Emerging Markets, we are developing standard 

option terms for transactions referencing 

guage among regions in order to attain the greatest 

possible degree of uniformity of approach, 

which in turn assists processing and automation. 

Emerging European and Asia Closed Market 

Once the June 2009 documentation suite is completed, 

future projects will be selected according 

to product volume metrics for non-electronically 

eligible transactions. One factor in considering a 

new project will be whether standardization of its 

documentation will facilitate electronic trade processing. 

ISDA has also committed to an update of 

the 2002 Equity Derivatives Definitions in 2010. 

shares and indices. We are also developing standard 

basket option language for generic use in 

the four equity regions (US, Europe, Asia ex-Japan 

and Japan) as well as substitution language 

for use when an extraordinary corporate event 

occurs. We are completing documentation for the 

interdealer discrete swap business for all regions. 

ISDA remains committed to consistency of lan- 

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ISDA continues to sponsor efficient amendments to industry standard documentation via the protocol 

process. In February of 2008, ISDA launched the AEJ Equity Protocol. This protocol is multi-functional: 

it amends existing trade documentation to provide technical amendments to settlement provisions; it 

updates the Additional Representations for use with Indian Underliers; and provides a new market standard 

for variance swap market disruption events. 

In addition, the Committee continues to be involved in discussions with regulators in both the UK as well 

as in Australia regarding the inappropriate disclosure requirements of cash-settled OTC derivatives as 

though they were physical positions in shares. 

CONTACT: 

Katherine Darras 

General Counsel, Americas, Head of Equity, 

FX and Interest Rates Legal 

KDarras@isda.org 


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Energy, 

Commodities & 

Developing 

Products 


A 

number of documentation projects are currently underway in the area of energy, commodities 

and developing products. In the area of transactions in natural catastrophe and weather 

derivatives (see article on Natural Catastrophe Swaps), an ISDA confirmation template for 

US wind events will be finalized in early spring. The existing suite of confirmation templates for weather 

index transactions has been expanded to include critical cooling and heating degree days, plus total 

precipitation. 

In physical oil trading, the Canadian Addendum to 

the ISDA US Oil Annex will be finalized in spring 

to form the ISDA North American Oil Annex. Prepublication 

drafts of the confirmation templates 

to the ISDA Global Physical Coal Annex for forward 

and option transactions were circulated in 

March. 

develop an additional form to cover transactions 

into non-EU registries, mainly Switzerland, Japan, 

Australia and New Zealand. The new template, 

to be circulated in April, will include language 

for operational provisions that are common to all 

national registries under the UN Kyoto Protocol, 

plus country-specific sub-annexes to cover any 

Trading emissions allowances is another focus 

for 2009. Based on the ISDA form for emissions 

transactions in the EU trading scheme, ISDA will 

domestic exceptions. The existing ISDA US Emissions 

Annex has been revised to include carbon 

allowance transactions under regional trading 

schemes currently operational, such as RGGI. 

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An increase in the number of Continental trading 

hubs covered by ISDA European Gas Annex 

for physical gas trading is targeted. ISDA is in 

touch with NAESB about the effects of changes 

proposed by NAESB on the ISDA North American 

Gas Annex, and the need to develop supplemental 

ISDA language to that effect. Updating 

the ISDA Energy Bridge and developing standardized 

language for letters of credit are also to 

be addressed in 2009, and a project to develop 

ISDA templates for commodity index transactions 

is now underway. 

CONTACT: 

Peter Werner 

Policy Director 

PWerner@isda.org 

Japan Property 

Derivatives 

Amid increasing interest, the Japan Property Derivatives Working Group was formed to discuss 

the development of the market. It is important for there to be high-quality indices on 

which participants feel comfortable to trade, and the Working Group discussed requirements 

for property indices for derivatives transactions. Indices sponsored by IPD and Association 

for Real Estate Securitization (ARES) were deemed most suitable. ARES’s index was included in 

the Annex A of the 2007 ISDA Property Index Derivatives Definitions published in July 2008. 

Documentation is another important element 

for the growth of the market. The Japan Property 

Derivatives Documentation Task Force 

was formed to prepare and amend the confirmation 

template for Japanese property index 

derivatives. 

to the financial instrument business”, as specified 

in Article 35. It is still unclear, however, 

whether banks can enter into property index 

derivatives under the Banking Act. Regulators 

indicated concerns on the impact on the financial 

strength of banks, as well as the soundness 

of property indices. ISDA will continue 

dialogues with the FSA for cross-regulatory 

Under the Financial Instruments and Exchange 

clarifications. 

Act (FIEA), property index derivatives would be 

considered as “any other business incidental 

CONTACT: 

Tomoko Morita 

Policy Director & Head of Tokyo Office 

TMorita@isda.org 

20

Infrastructure 

Portfolio 

Compression & 

Market Practice 

Changes 

ISDA and the industry continue in our efforts to strengthen the overall infrastructure of the financial 

markets, particularly the credit derivatives market. One such effort, portfolio compression, has focused 

on the continued rapid growth in trade volumes and ways to reduce the number of trades 


outstanding without modifying the overall risk between parties or the resulting cash flows. 

Portfolio compression allows for a reduction in 

outstanding trade count and gross notional by 

replacing portfolios of existing bilateral trades 

which have the same reference entity, restructuring 

basis and maturity with two trades of the 

same reference entity, restructuring basis and 

maturity. 

The reduced trade count reduces operational risk 

at the time of a credit event, as there are fewer 

trades to settle. Efficiency is also enhanced as 

a result of there being fewer trades to maintain 

and make payments on. Gross notional outstanding 

is lowered which allows for increased capital 

efficiency—firms can set aside less capital for 

their CDS positions while maintaining the same 

risk profile and cash flows across all counterparties. 

Depending on how the limits are set, the risk 

profile with a specific counterparty might change, 

if participants allow for that change. 

Following a selection process under the guidance 

of the ISDA Credit Steering Committee, 

Markit Partners and Creditex were chosen to do 

the initial rounds of portfolio compression for single 

name trades. These started in August 2008 

21

and have continued into 2009 on a frequent basis 

for both North American and European reference 

entities. In addition to the work being done by 

Markit and Creditex, Trioptima continued its work 

on trade reductions in the index space. 

Modified Restructuring credit event, although it 

will continue to be available for those parties that 

want to specifically cover this credit event. These 

changes lead to a further standardization of the 

market and will facilitate the implementation of a 

The success of compression both for single name 

and index trades explains a good portion of the 

central clearing environment for CDS trades. Discussions 

are ongoing for standardization in other 

jurisdictions. 

reduction in outstanding notional in 2008 from the 

previous year’s record. 

CONTACT: 

On April 8, 2009 the market practice for North 

America changed the use of fixed coupons of 

100 bps and 500 bps for single name trades. In 

Karel Engelen 

Director and Global Head, Technology Solutions 

KEngelen@isda.org 

conjunction with this, the compression algorithm 

changed as well for 100 bps and 500 bps fixed 

coupon trades. At the same time the North American 

market will no longer trade by default with the 

22


Collateral 

The last year has been exceptionally productive for ISDA’s Collateral Committee, co-chaired by 

Michael Clarke of UBS and Shaun Sheppard of Goldman Sachs. For the first time, commitments 

were made to regulators in connection with collateral management. These were reflected in the 


July letter issued to regulators by a group of 16 banks, and further outlined in an October follow-up. In 

essence, the commitments covered portfolio reconciliation, margin dispute resolution and the production 

of a roadmap for the collateral function. The Collateral Committee meets approximately every two weeks 

as an update/validation forum. Work in the collateral management area is divided across four Working 

Groups roughly corresponding to the regulatory commitments that have been made: 

deliver the above-mentioned roadmap in May 

2009. Topics covered include the production 

of a best practice document, standardization, 

electronic communication of margin calls and 

interest payments, margin call time frames and 

central intermediation of margin calls. 

• Portfolio Reconciliation—this group has driven 

process improvement and uptake. All 16 firms 

met the target of performing weekly (or better) 

reconciliations of all intra-group portfolios 

of more than 5,000 trades by the end of 2008. 

Follow-on targets, both quantitative and qualitative, 

have been agreed upon. 

• Potential Industry Improvements—this group will 

• Dispute Resolution—Analysis of existing methodologies 

will result by end-April in the Group’s 

23

ecommendation for improvements and standard 

methodologies in this area. 

• Infrastructure—this is the forum for engagement 

between the firms and the vendor solution providers 

in collateral; it will take forward the build/ 

enhancement requirements identified by the 

other groups. 

CONTACT: 

Julian Day 

Head of Trading Infrastructure 

JDay@isda.org 

Nichole Framularo 

Director of Trading Infrastructure 

NFramularo@isda.org 

Clive Ansell 


CAnsell@isda.org 

Jeffrey Kan 


JKan@isda.org 

Anna Dunster 


ADunster@isda.org 

24


Operational 

Scalability 

Over the past year, there has been unprecedented activity within the derivatives space. Market 

events have demonstrated that the operational infrastructure works well, but further improvements 

are needed. While scalable OTC derivative processing and infrastructure have 


always been fundamental to successful market growth and resiliency, they become even more critical 

during stressed markets. Throughout the course of the year, market participants outlined concrete plans 

for these improvements, which also enhance risk mitigation. 

ISDA co-signed three derivative industry letters 

to regulators in March, July and October which 

detailed operational targets, commitments and 

strategies. ISDA worked in conjunction with the 

The commitments cover all major OTC derivatives 

asset classes as well as look to improve 

collateral management practices for these transaction 

types. Key targets include: 

major dealers and buy-side institutions represented 

on the Operations Management Group (OMG) 

to present a series of strategic steps to further 

strengthen the operational infrastructure for OTC 

derivatives at varying points in time throughout 

the lifecycle process. 

• increased electronic processing of eligible 

trades; 

• enhanced trade date confirmation issuance and 

execution; 

• elimination of material confirmation backlogs; 

• risk mitigation for paper trades; 

25

• streamlined trade life cycle management; 

• reduction in levels of outstanding trades via 

Questions Guide on Credit Derivative Processing 

Standards. 

portfolio compression; 

• central settlement for eligible transactions. 

Each of these efforts aims at reducing manual 

intervention and increasing straight-through-processing 

aspects where possible. 

As the over-the-counter derivatives industry continues 

to improve its post-trade performance efficiency 

across a range of metrics, industry implementation 

groups will continue to work toward 

further automation, confirmation backlog reductions 

and increased use of technology to optimize 

efficiency. 

To continue the operational improvements, market 

participants agreed on several fundamental 

milestones, including use of central counterparties 

for credit derivative transactions, increasing 

the portion of equity derivatives eligible for 

electronic matching, increasing credit derivative 

electronic submission timeliness for eligible 

transactions, and developing plans for central 

trade repositories for equity and interest rate derivatives. 

In an effort to advance industry objectives, ISDA 

co-sponsored educational events that provided 

detailed updates on the commitments and their 

current states-of-play in New York, London, 

Sydney, Hong Kong and Tokyo. These events 

CONTACT: 

Julian Day 

Head of Trading Infrastructure 

JDay@isda.org 

Nichole Framularo 


NFramularo@isda.org 

Clive Ansell 


CAnsell@isda.org 

Jeffrey Kan 


JKan@isda.org 

Anna Dunster 


ADunster@isda.org 

aimed to further the industry’s understanding of 

the various operational commitments. Additionally, 

ISDA jointly published a Frequently Asked 

26

FINANCIAL PRODUCTS MARKUP LANGUAGE 

FpML 

The rapid changes in the OTC derivatives indus- 

FpML expansion has focused in the areas of commercial loans and financial commodities, with 

work in the physical commodities area soon to come. The existing asset classes have been 

updated as well, to reflect ongoing changes in documentation and market practice. The equity 

area is a good example of this work. 

In 2008, FpML versions 4.3 and 4.4 were published 

as Recommendations, within the 6-month pand the coverage of the underlying standards. 

try lead to a continuous need to improve and ex- 

cycle for minor versions. Version 4.5 became a This standardization and automation will further 

Recommendation in March 2009 and the devel- 

increase the usefulness and importance of FpML 


as a technical standard. 

opment of version 4.6 has begun. The next major 

version (5.0), is moving towards completion. 

At this stage, most major architectural changes 

have been agreed upon and are implemented in 

the draft versions. The collateral area has been 

targeted for further development. 

CONTACT: 

Karel Engelen 

Director and Global Head, Technology Solutions 

KEngelen@isda.org 

Together with Swift, FIX and ISITC, FpML published 

an industry roadmap to reflect how the 

different financial industry standards can fit together 

and where their respective strengths lie. It 

is available at the Investment Roadmap page on 

the FpML site: (http://www.fpml.org/documents/ 

InvestmentRoadmap_20080411.pdf). 

27

FpML® 

Blue Sky Thinking 

28 

www.fpml.org

Risk & Reporting 

Accounting 

Changes to accounting for financial instruments proposed by the Financial Accounting Standards 

Board (FASB) and the International Accounting Standards Board (IASB) in 2008 affected 

ISDA members around the world. ISDA Accounting Committees were particularly active 

in Tokyo, New York and London throughout 2008, consulting with and presenting to regulatory officials. 

Key issues in the last year included volatility in the credit and financial markets, fair value measurement, 

and global convergence of accounting standards. 

In Europe, IASB proposed several amendments 

to IAS 39 on hedge accounting and classification 

of financial assets. Of particular importance were 

some fast-tracked proposals on reclassification 

of financial assets, and another on embedded 

derivatives. The Accounting Committee was active 

in all consultations, and was also involved 

with the FASB proposals to clarify paragraph 14B 

of Statement 133, which discusses whether an 

embedded derivative must be separated from its 

host contract. FASB’s Statement 161 proposals 

then amended Statement 133, by requiring expanded 

disclosures about an entity’s derivatives 

and hedging activities. 

FASB and IASB issued an updated Memorandum 

of Understanding (MOU) describing priorities and 

milestones related to the completion of major 

projects by 2011. IASB board member Stephen 

Cooper, speaking at ISDA’s Accounting Symposium 

in London, said that while the two boards 

have made considerable progress in converging 

Supervision 

29

their sets of standards, progress on other major 

projects has been limited. Differences in views 

about the scope of the projects, and on resolving 

similar issues in active projects, have hampered 

results. In response, the boards put together a 

team to develop recommendations on moving 

forward. 

The Accounting Committee responded to the 

CONTACT: 

Ed Duncan 

Director, Head of Risk and Reporting 

EDuncan@isda.org 

Huzefa Deesawala 

Head of Finance 

HDeesawala@isda.org 

Antonio Corbi 

Assistant Director, Risk and Reporting 

ACorbi@isda.org 

IASC Foundation (IASCF) consultation to enhance 

its Constitutional framework. The IASCF is 

the legal entity under which IASB operates, and 

is governed by a board of 22 Trustees. ISDA participated 

in all roundtables to promote the independence 

of the IASB standards process. 

Looking forward, convergence to one set of global 

accounting standards is a key initiative in the 

years ahead. The SEC proposed a roadmap toward 

the use of International Financial Reporting 

Standards (IFRS) as the global accounting standard. 

A transition to IFRS for fiscal years ending 

after December 2014 has been proposed. 

30


Fair Value 

Accounting 

The Securities and Exchange Commission (SEC), IASB and FASB issued guidance clarifying 

fair value measurement in 2008. The guidance touched on topics such as modeling assumptions 

when there is no relevant market data, use of broker quotes and distressed sales, and assessment 

of other-than-temporary impairments. In a related development, FASB proposed amendments 

to Statement 157 on how to determine the fair value of a financial asset when markets are inactive. 

ISDA’s Accounting Committee was actively involved throughout the consultation process. 

ISDA members were selected last year for IASB’s 

Expert Advisory Panel, which issued a report on 

was based on amortizing costs. The delayed response 

only worsened the damage. 

fair value measurement and disclosures for illiquid 

instruments. The EAP’s report has become a 

trusted source of educational guidance on both 

sides of the Atlantic. 

It seems clear that fair value is on the minds of 

many as we negotiate the current economic turmoil, 

especially as it relates to mark-to-market 

accounting. Failure to use mark-to-market has 

caused difficulties before. Large losses made by 

banks during the 1973 oil crisis and the 1990s 

Japanese banking crisis had their roots in nonperforming 

mortgage portfolios. In both cases, 

losses were not recognised (that is, marked to 

market) for years since the accounting model 

Policymakers’ recommendations should support 

transparency measures. Fair value is one of the 

tools to restore investor confidence and resume 

normal bank lending behaviour. Refinements in 

measuring and reporting profit and losses for financial 

instruments that do not trade or trade in 

illiquid markets could be introduced without compromising 

the core principles of fair value. 

CONTACT: 

Antonio Corbi 



Supervision 

31


Eu Savings Tax 

Directive 

The European Union is reviewing the Savings Tax Directive and potentially extending its scope 

on principles of better regulation. The aim of the Directive is to exchange information on savings 

income in one Member State with other Member States, through financial institutions. 

The actual assessment of any associated tax liability 

is purely a matter for the tax administration 

and the beneficial owner since the information 

exchange process is quite distinct from the tax 

assessment. The objective is to ensure that citizens 

of one Member State do not evade taxation 

by either depositing funds or transacting outside 

their jurisdiction of residence, thus distorting the 

The European Commission is also negotiating 

with certain countries outside the EU, such as 

Switzerland, Lichtenstein, or the United States, 

to make them enact equivalent provisions. Without 

such measures, the purpose of reducing tax 

evasion is unlikely to be achieved, but would still 

impose a huge cost to Member States’ financial 

institutions. 

single market. Through better regulation the EU 

may be also tempted to make taxable, within the 

scope of the Directive, more complex structures. 

However, there are proposed obligations under 

the Directive that have the potential to create 

havoc among European financial institutions. 

The first is the operational burden that might 

CONTACT: 

Ed Duncan 

Director, Head of Risk and Reporting 

EDuncan@isda.org 

Antonio Corbi 



be imposed due to the information exchange 

process and the retrospective application of the 

Directive. The second is the scope of the review 

and the potential to include other types of debtgenerating 

obligations that could be characterized 

as income. 

32

Public Policy 

Financial Law 

Reform 

On the international level, several legal reform efforts affect trading in OTC derivatives. In 

UNIDROIT (International Institute for the Unification of Private Law), the Convention on Harmonised 

Substantive Rules Governing Intermediated Securities has undergone the first of 

two phases of adoption by member states. Chapter V of this convention contains key provisions on 

collateral arrangements and netting. The final session for adoption is scheduled for October 2009. The 

ISDA proposal for a global convention on netting in financial services has been included in the preliminary 

UNIDROIT work programme for 2009-2011. ISDA has submitted a further draft outline of such a 

convention to the Governing Council for final decision in late April 2009. 

In the meantime, the European Commission continues 

its review of the EFMLG/ISDA proposal for ity Directive, and the Insolvency 

and insurance companies), the Settlement Final- 

Regulation. 

Supervision 

an EU directive on netting. Several other industry 

associations have expressed support for the proposal 

as well. A key aspect of the proposal is the 

harmonization of set-off and netting provisions 

across various EU instruments. Some of the instruments 

addressed include the Collateral Directive, 

Winding-up Directives (for credit institutions 

In the context of UNCITRAL (the United Nations 

Commission on International Trade Law) ISDA 

was invited to an expert group of the Financial 

Markets Law Committee to discuss the effects 

of a possible UK adoption of the UN Convention 

on Contracts for the International Sale of Goods 

33

(CISG/Vienna Sales Convention). This treaty is 

in force in most major jurisdictions in the Americas, 

Europe and Asia. The convention has effects 

on physical and financial transactions in 

a range of commodities and commodity derivatives, 

especially those governed by English law. 

It is widespread practice to exclude the CISG 

from transactions governed under any other law 

(in particular New York law), and recent ISDA 

documentation in this area has featured a CISG 

In February 2009 the UK Banking Act introduced 

a new netting regime for transactions with British 

banks and building societies. One of the 

main features is the special resolution regime 

for failing banks and building societies. For the 

moment, the previous netting regime remains in 

place for transactions with all other types of UKbased 

counterparties. However, it is intended to 

extend the new regime to investment firms over 

the summer of 2009. 

waiver provision (eg the ISDA US Oil Annex). 

Several pieces of secondary legislation entered 

On the European Union level, the EU Regulations 

on the Law Applicable to Contractual Obligations 

(the so-called Rome 1 Regulation) and Non-Contractual 

Obligations (Rome 2 Regulation) have 

entered into force. The Brussels 1 Regulation, on 

the Recognition and Enforcement of Judgments 

in Civil and Commercial Matters, is up for review. 

In the context of transactions under English law 

among counterparties located in EU jurisdictions, 

all these regulations have an effect on the choice 

into force at the same time. Among them is the 

Restriction of the Partial Property Transfer Order 

2009 (Safeguards Order). It aims to protect all 

transactions commonly included in netting and 

collateral arrangements. Upon publication, ISDA 

made specific proposals to the UK authorities in 

order to address some shortcomings that affect 

the contents of any legal opinion involving UK 

banks and building societies. UK authorities intend 

to make the clarifications before mid-year. 

of law provisions, as well as the choice of forum 

CONTACT: 

Peter Werner 



clause. In a separate project, ISDA co-chairs a 

working group of legal practitioners and academics 

that in March 2009 started discussing the use 

of arbitration in financial services, especially derivatives. 

34

Public Policy 

United States 

The last two years have seen a rapid shift in perceptions about OTC derivatives from public policymakers 

in the United States. Up to and immediately after passage of the Commodity Futures 

Modernization Act in 2000 (CFMA), the US Congress and regulators were broadly supportive 

of the OTC business and recognized the valuable role derivatives play in the economy. Following the 

West Coast energy crisis in 2001-02, there was a small but vocal group of policymakers interested in 

repealing parts of CFMA, but these efforts were routinely defeated in Congress. 

Starting in 2007, however, such efforts gained the role of speculation in high commodity prices. 

greater support culminating in passage last year After the credit market collapse, derivatives have 

of the CFTC Reauthorization Act of 2008. This law come under even greater scrutiny in the US. Current 

legislative proposals require that all increased regulation and oversight of so-called 

OTC 

Supervision 

“significant price discovery contracts,” or OTC 

contracts in commodities, which were closely tied 

to prices on exchange-traded futures contracts. 

Passage of the legislation was immediately followed 

by even greater support for new restrictions 

on OTC activity, particularly with respect to 

derivatives be cleared, give US regulators the 

power to order OTC participants to liquidate their 

positions, and in some cases even call for an 

outright ban on OTC derivatives. Although such 

a ban is unlikely, its proponents form a powerful 

minority in the US policymaking community. 

35

CONTACT: 

Greg Zerzan 

Counsel and Head of Global Public Policy 

GZerzan@isda.org 

The outlook suggests that significant change in 

the US regulatory approach to OTC derivatives 

is likely. What form this change will take is not 

yet clear, but across both the regulatory and congressional 

communities there is a consensus that 

greater transparency and oversight is required. 

36

Public Policy 

European Union 

The year 2008 saw considerable EU scrutiny of the role of OTC derivatives in the financial 

turmoil. Lehman Brothers’ failure in September motivated the European Commission (EC) to 

establish a working group on OTC derivatives in October, with the priority of developing a “European 

solution” for central clearing of CDS. Regulators were concerned with perceived systemic risk in 

CDS markets, and fearful of insufficient European oversight should a global central counterparty (CCP) 

be established outside the EU. Working group discussions faltered in December over dealing firms’ 

preference not to be required to clear their CDS trades in a European clearing house, but by February 

2009, nine dealers had agreed to clear trades in an EU-based CCP by end-July. 

The working group will now begin looking at the Concerns about CDS combined with the rocky 

other types of OTC derivatives, plus issues such start of the working group had prompted proposed 

Supervision 

as transparency. ISDA has already contributed to 

a Committee of European Securities Regulators 

(CESR) consultation on transparency. Information 

gleaned from CCPs and from the Depository 

Trust & Clearing Corporation (DTCC) Trade 

Warehouse may prove valuable therein. 

amendments to the Capital Requirements Directive 

(CRD) in the European Parliament, levying 

punitive capital requirements on CDS trades not 

cleared in a European CCP. These amendments 

were defeated, though the EP called for a review 

of OTC derivatives markets (an EC report will be 

published end-2009). The Market in Financial In- 

37

struments Directive (MiFID) is also under review, 

with derivatives a thematic priority. 

markets. Policymakers have found no clear link 

between non-commercial participation and high 

prices, but this issue remains contentious. 

This focus on derivatives has led to a delay in 

the review of exemptions for commodity firms 

from MIFID and CRD. ISDA helped persuade 

policymakers to support later expiry of an exemption 

from the CRD (from end-2012 to end-2014), 

pending this review. 

CONTACT: 

Richard Metcalfe 

Global Head of Policy 

RMetcalfe@isda.org 

Roger Cogan 

European Policy Director 

RCogan@isda.org 

ISDA is also busy at EU level defending the role 

of non-commercial participants in commodity 

38

Public Policy 

Emea Emerging 

Markets 

In Europe, Poland and Slovakia have become focus countries for ISDA’s work in 2008/2009 with 

EU accession countries. In Poland, implementation of the EU Collateral Directive has been delayed 

as financial collateral arrangements and securities lending transactions are not yet included in the 

scope of nettable transactions under the Bankruptcy Act. This has delayed ISDA in commissioning a collateral 

opinion on Poland thus far. In Slovakia, issues around the scope of eligible transactions as well 

as the range of counterparties eligible to netting and collateral agreements remain problematic despite 

improvements on the netting front. Also, transactions governed under laws from outside of the EU face 

restrictions. In southeastern Europe, ISDA will continue to monitor developments in Croatia and has 

started to look into the general legal landscape for derivatives in Bulgaria and Serbia. 

Among countries in the CIS region, Russia continues 

to be the top priority. It is expected that in late 2007. Additionally, the final version of 

version that was submitted to the Lower House 

a 

Supervision 

the Russian government will submit its draft bill 

on netting to the Lower House in April. The main 

regulator provided a rough outline of its ideas 

Russian local master agreement is scheduled for 

publication in the summer. ISDA is an observer to 

the drafting process. 

during an event jointly organized by EBRD, ISDA 

and three Russian banking associations in late 

2008. This draft bill is meant to replace an earlier 

In Ukraine, ISDA is involved in discussions with 

local regulators and parliament in order to include 

39

major amendments to a draft bill on derivatives 

Discussions on the general legal framework for 

derivatives transactions have also been initiated 

with regulators in Qatar. 

which had been initially proposed in 2007. A revised 

draft from 2008 is on hold in order to allow 

for more input from experts. In January 2009, 

the Civil Code of Kazakhstan was amended to 

include definitions of various derivative instruments. 

Pursuant to talks with Kazakh regulators, 

ISDA has been requested to provide comments 

on the forthcoming draft bill on netting. 

Africa 

In late March, a new draft bill on insolvency 

was submitted to parliament in Mauritius. The 

bill includes a chapter drafted by ISDA and endorsed 

by the local banking association to introduce 

close-out netting into local law, as well as 

Middle East 

The final draft of the ISDA/IIFM Ta’Hawwut 

(Hedging) Master Agreement, the Islamic version 

of the conventional ISDA Master Agreement, 

has been submitted for final approval to 

updated conflict of law provisions in the area of 

intermediated securities. Updates on the general 

legal framework for derivatives in Morocco and 

Egypt have been circulated to the ISDA CEE/ 

EMEA Committee. 

the IIFM Board of Shariah Experts. Publication 

is expected for mid-2009. Version 1 of this document 

will cover Islamic profit-rate swaps based 

on commodity Murabaha. ISDA met with regulators 

in the United Arab Emirates to discuss the 

introduction of the uniform legal regime for derivatives 

transactions on the federal law level. Of 

In the context of ISDA’s proposal to UNIDROIT 

on a global convention on netting in financial services, 

initial contacts to regulators in Nigeria have 

been established, in order to emphasize the need 

for legal reform. Recently, regulators have started 

efforts to establish a local swap market. 

key concern are general derivatives transactions 

CONTACT: 

Peter Werner 



issues, and close-out netting in particular. ISDA 

has been asked to provide official comments on 

existing regulations issued under the auspices of 

various regulators. Currently three different regulators 

supervise different areas of the markets. 

40

Public Policy 

Asia Pacific 

Some broad trends and noteworthy themes that have emerged across the APAC region in response 

to the financial crisis. On the positive side, there has not been a “knee-jerk” reaction 

by Asian regulators against OTC derivatives. They generally express support for a market 

discipline approach to regulation, though this is tempered by a desire to protect individual domestic constituencies 

from significant financial losses. The concern heard repeatedly throughout the region is that 

retail investors and small and medium enterprises alike are entering into complex derivatives transactions 

without understanding the risks or having the sophistication to manage them. However, this has not 

led to more regulatory hurdles, except in the retail structured product space, where regulators in Taiwan, 

Singapore and Hong Kong have announced plans to review the regulatory framework 

Asian regulators have also been following international 

developments such as central counterparty been filed in South Korea and India, 

Also of concern are the court cases that have 

especially 

Supervision 

clearing (CCP), anti-cyclical regulatory capital requirements 

and MTM accounting changes. Some 

would like to see their own national champions 

emerge as the Asian CCP, though rivalries and 

lack of economies of scale present challenges to 

regional implementation. 

the Korean cases. In 3 out of 6 cases, the Seoul 

District Court has granted payment injunctions 

to Korean exporters that had put on (frequently 

leveraged) Won KIKO (knock-in, knock-out) option 

trades that have gone against them as the 

Won depreciated. Though the Korean Civil Code 

41

does enshrine the requirements of trust and good 

faith in dealings, the court’s liberal interpretation 

of this and the related doctrine of “changed circumstances” 

means that banks can no longer 

In the India cases, interim orders have so far basically 

upheld the sanctity of contracts. Nevertheless, 

ISDA is keeping a close watch on all these 

pending cases. 

safely transact on an arm’s length basis with their 

counterparties, and that enforceability of legal 

contracts is undermined. Indeed, the court’s decisions 

are tantamount to a finding that banks owe 

a duty of care to their counterparty and must ensure 

that the transaction is suitable and that the 

counterparty both understands and can manage 

CONTACT: 

Keith Noyes 

Regional Director, Asia Pacific 

KNoyes@isda.org 

Jacqueline Low 

Senior Counsel, Asia Pacific 

JLow@isda.org 

the risks of the transaction. 

42

Public Policy 

JAPAN 

Throughout 2008, ISDA continued to provide forums for members to contribute to the development 

of Japan’s privately negotiated derivatives market. Following the market events of late 

2008, Japan Credit Derivatives Committee members grew increasingly concerned with media 

coverage of the CDS business. To promote an accurate understanding of the business, members prepared 

and published a Japanese-language FAQ on credit default swaps. The piece covered a range 

Supervision 

posed daily price limitations constitute a Market 

Disruption Event for equity variance swaps. ISDA 

facilitated conference calls for market participants 

to consider different approaches in promoting 

orderly valuation and settlement. As a result, 

the Working Group agreed on a set of guidelines 

of topics including product descriptions, market trends, applicable regulations and CDS impact on the 

financial crisis. 

On the equities front, the Variance Swap Working 

Group formed under the Japan Equity Deriva- 

Practice Statement. 

in March 2009, published by ISDA as a Market 

tives Committee continued active discussions on 

the circumstances under which exchange-im- 

ISDA carried on dialogue with Japanese regulators 

on improving the market environment, and 

addressed remaining issues in implementing the 

Financial Instruments and Exchange Act (FIEA). 

FIEA covers the treatment of collateral posted 

against OTC financial future transactions in light 

of client asset segregation rules. These are situ- 

43

ations in which the loan and set-off approach in 

ISDA’s Collateral Support Documents would not 

be appropiate. 

In the new products area, ISDA was involved in 

the deliberations of the Study Group organized 

CONTACT: 

Tomoko Morita 

Policy Director & Head of Tokyo Office 

TMorita@isda.org 

Kumi Namba 

Assistant Director, Policy 

KNamba@isda.org 

by the Ministry of Economy, Trade and Industry 

on Japan’s emissions trading market. ISDA submitted 

comments to the resulting report on practical 

issues such as transfer/delivery/settlement of 

Kyoto Credits, and valuation methodology. 

Accounting standards are increasingly important 

for the sound development of the OTC derivatives 

market. The Japan Accounting Committee 

was formed in 2008 to discuss and examine market 

practices, such as hedge fund accounting 

rules, fair value measurement and international 

convergence of accounting standards. 

44

Education & Outreach 

Research 

The ISDA Research team supports education and policy activities, primarily by means of seminars 

and surveys. But 2008 saw the addition of a new initiative: the launch of ISDA Research 

Notes, a quarterly publication that discusses public policy issues and market trends related to 

OTC derivatives. The first Note, “The ISDA Market Survey: What the results show and what they don’t 

show,” appeared in late 2008. It discussed why Market Survey results are a reasonable measure of 

market size and growth, but not of risk. The second Note appeared at the start of 2009, and discussed 

transaction transparency for OTC derivatives, and why a “one size fits all” model of transparency does 

not promote market efficiency. 

With regard to education, ISDA Research developed 

a recurring seminar on Counterparty Credit 

Risk. The new seminar covers measurement and 

management of the credit risk associated with 

derivatives. In addition to presentations by ISDA 

Research staff, the seminar features a practitioner 

panel consisting of lawyers and collateral managers. 

See www.isda.org for upcoming dates. 

ISDA Research continues its regular Survey activities, 

which consist of the semi-annual Market 

Survey and the annual Margin Survey and Operations 

Benchmarking Survey. The Operations 

Benchmarking Survey underwent significant revisions 

for 2008 in order to achieve consistency 

with the data contributed by the G16 dealer 

group. In addition, the Market Survey now distinguishes 

between bought and sold protection 

Education Education & Outreach & 

Outreach 

45

in its credit default swap notional amounts. The 

above notional amounts, which total $531.2 trillion 

across asset classes, are an approximate 

measure of derivatives activity, and reflect both 

new transactions and existing transactions. The 

amounts, however, are a measure of activity, 

not a measure of risk. The Bank for International 

Settlements (BIS) collects both notional amounts 

and market values in its derivatives statistics and 

it is possible to use the BIS statistics to determine 

the amount at risk in the ISDA survey results. 

Finally, ISDA Research continues its involvement 

in clarifying market practice for OTC derivatives, 

with the objective of reducing the number of disputes 

that might arise from differing interpretations 

of market standards. One recent effort has 

been to clarify the compounding conventions 

used in derivative transactions; results are posted 

on the Trading Practice Committee webpage. 

Another has been to work with other industry 

groups to ensure consistency across documents 

for varying asset classes. 

CONTACT: 

David Mengle 

Head of Research 

DMengle@isda.org 

Anatoli Kuprianov 

Director of Technical Analysis 

AKuprianov@isda.org 

Julia Pachos 

Research Associate 

JPachos@isda.org 

46

Source: ISDA Research 

Education & 

Outreach

Education & Outreach 

Membership 

In 2008 ISDA welcomed 100 new members. To date ISDA’s membership totals over 820 financial 

institutions, government entities, corporations and professional service providers, spanning 57 

countries and six continents. ISDA continues to work through its active committees, working groups 

and educational efforts to address ongoing industry needs. ISDA’s members are classified into three 

categories according to the guidelines contained in its by-laws. 

Primary Members – dealer firms 

According to the Association’s by-laws, every investment, 

merchant or commercial bank or other 

provides a forum for these industry participants to 

stay abreast of and contribute to important developments 

and initiatives. 

corporation, partnership or other business organization 

that, directly or through an affiliate, as 

part of its business (whether for its own account 

or as agent), deals in derivatives shall be eligible 

for election to membership in the Association 

as a Primary Member, provided that no person 

or entity participates in derivatives transactions 

solely for the purpose of risk hedging or asset or 

liability management. 

Subscriber Members – end-users 

ISDA’s Subscriber Membership category is designed 

for corporations, financial institutions, 

government entities and others who use privately 

negotiated derivatives to better manage financial 

risks. Subscriber Membership provides a forum 

for these industry participants to stay abreast of 

and contribute to important developments and 

initiatives. 

Associate Members – service providers 

ISDA’s Associate Membership category is designed 

for service providers — brokers, law firms, 

accounting firms, consulting firms and software 

providers — who are active in the privately negotiated 

derivatives business. Associate Membership 

Only ISDA members are entitled to receive the 

Association’s legal opinions on the enforceability 

of the netting provisions of the ISDA Master 

Agreements. ISDA has obtained netting opinions 

for 53 jurisdictions. In addition to the netting opin- 

48

ions, ISDA provides members with legal opinions 

on the ISDA Credit Support Documents from 43 

receive complimentary copies of all new publications 

upon their release. 

different jurisdictions. 

Only ISDA members are able to participate in the 

Association’s numerous Committees, Working 

Groups and Task Forces, which serve to address 

issues in the rapidly evolving derivatives market. 

Only ISDA members are eligible to attend the Association’s 

Annual General Meeting, which is the 

industry’s preeminent forum for the discussion of 

developments and issues in the privately negotiated 

derivatives business. 

ISDA members exclusively receive the numerous 

policy papers, response letters, market survey 

data and communications on key business 

issues that the Association and its consultants 

In addition, a strong preference is given to enlisting 

speakers from ISDA member firms at the 

Association’s numerous conferences and seminars. 

generate. 

ISDA members receive substantial discounts 

when ordering copies of the Master Agreement 

and supporting documents published by the Association. 

Primary Contacts at member firms 

CONTACT: 

Liz Zazzera 

Director of Conferences & Membership 

LZazzera@isda.org 

Education & 

Outreach

ISDA PRIMARY MEMBERS 

Abbey National Plc 

ABSA Bank Ltd. 

Abu Dhabi Commercial Bank 

Accord Energy Limited 

Agricultural Bank of China 

Allied Irish Banks, plc 

American International Group, Inc. 

American International Group, Inc. 

AmInvestment Bank Bhd 

Andorra Banc Agricol Reig, S.A. (ANDBANC) 

Aozora Bank 

Assured Guaranty Corp. 

Australia and New Zealand Banking Group, 

Limited 

Axis Bank Ltd. 

Banca Akros Spa 

Banca Aletti & C. S.p.A. (Gruppo Banco 

Popolare di Verona e Novara) 

Banca d’Intermediazione Mobiliare IMI S.p.A. 

BANCA INTERMOBILIARE SpA 

Banca Monte Dei Paschi Di Siena SpA 

Banca Popolare di Milano scarl 

Banca Popolare di Vicenza 

Banca Profilo, S.p.A. 

Banco Bilbao Vizcaya Argentaria, S.A. 

Banco BPI, S.A. 

Banco Bradesco S.A. 

Banco Comercial Portugues S.A. 

Banco Espanol de Credito, S.A. (BANESTO) 

Banco Espírito Santo S.A. 

Banco Itaú S/A 

Banco Popular Espanol 

Banco Votorantim S/A - Nassau Branch 

Bank BPH SA 

Bank Hapoalim B.M. 

Bank Julius Baer & Co. Ltd. 

Bank Leumi le-Israel B.M. 

Bank of America N.A. 

Bank of Beijing Co., Ltd 

Bank of China 

Bank of Ireland Global Markets 

Bank of Montreal 

The Bank of New York Mellon 

Bank of Ningbo Co., Ltd 

Bank of Nova Scotia 

Bank of Scotland plc, Treasury 

Bank of Shanghai Co., Ltd. 

Bank Vontobel AG 

Bankthai Public Company Limited 

Banque Degroof SA 

Barclays Capital 

Bayerische Hypo-und Vereinsbank AG (HVB) 

Bayerische Landesbank 

BHF Bank (Berliner Handels-und Frankfurter) 

BNP Paribas 

BP Plc 

Branch Banking and Trust Company (BB&T) 

BRE BANK SA 

BSI SA 

Caixa d’ Estalvis i Pensions de Barcelona “la 

Caixa” 

Caja De Ahorros De Galicia 

Caja de Ahorros Y Monte de Piedad de Madrid 

Calyon Corporation 

Cargill, Incorporated 

Carnegie Investment Bank AB 

Ceská sporitelna, a.s. 

China CITIC Bank 

China Construction Bank 

China Development Financial Holding Corporation 

Chinatrust Commercial Bank 

Chuo Mitsui Trust & Banking Co. Ltd. 

CIBC World Markets Inc. 

Citigroup 

Commerce International Merchant Bankers 

Berhad 

Commerzbank AG 

Commonwealth Bank of Australia 

Confederacion Espanola de Caja de Ahorros 

ConocoPhillips 

Coral Energy, L.P. 

Credit Industriel et Commercial (CIC) 

Credit Suisse 

Daiwa Securities SMBC Co. Ltd. 

Danske Bank A/S 

DBS BANK LTD 

DEPFA BANK plc 

Deutsche Bank AG 

Dexia Bank Belgium S.A. 

DnB NOR Bank ASA 

Dresdner Bank AG 

DZ BANK AG Deutsche Zentral-Genossenschaftsbank 

E.Sun Commercial Bank, Ltd. 

EDF Trading Limited 

EFG Eurobank Ergasias S.A. 

EFG International 

Erste Bank Group AG 

Europe Arab Bank plc 

F. van Lanschot Bankiers N.V. 

The First International Bank of Israel Ltd. 

50


FirstRand Bank Limited 

Fortis Bank NV/SA 

GASELYS 

Generali SGR S.p.A. 

Goldman Sachs & Co. 

Gulf International Bank (UK) Limited 

Hamburger Sparkasse 

Hang Seng Bank Limited 

HDFC Bank Limited 

Hess Energy Trading Company, LLC 

HSBC Holdings plc 

HSH Nordbank AG 

Hydro-Quebec 

ICICI Bank Limited 

IKB Deutsche Industriebank AG 

Industrial and Commercial Bank of China 

Industrial Bank Co., Ltd. 

Industrial Bank of Korea 

ING Bank N.V. 

Intesa Sanpaolo SpA 

Investec Bank Limited 

Irish Life & Permanent plc 

J.P. Morgan Chase & Co. 

Jefferies Group, Inc 

JSC Halyk Bank 

Jyske Bank A/S 

KASIKORNBANK Public Company Limited 

KBC Bank 

KeyCorp 

Koch Supply & Trading, LP 

Komercní banka, a.s. 

Kookmin Bank 

The Korea Development Bank 

Korea Exchange Bank 

Kotak Mahindra Bank Ltd. 

Landesbank Baden-Württemberg 

Landesbank Hessen - Thueringen Girozentrale 

Lloyds TSB Bank plc 

Macquarie Bank Limited 

Maple Bank GmbH 

Meliorbanca S.p.A. 

Mitsubishi UFJ Financial Group (MUFG) 

Mitsui & Co., Ltd. 

Mizrahi Tefahot Bank Ltd. 

Mizuho Financial Group 

Morgan Stanley & Co. International plc 

National Australia Bank Limited 

National Bank of Abu Dhabi 

National Bank of Canada 

National Bank of Greece 

National Bank Trust 

National City Bank 

NATIXIS 

Nedbank Limited 

NIBC 

Nomura Securities Co., Ltd. 

Norddeutsche Landesbank Girozentrale 

Nordea Bank Finland Plc 

Norinchukin Bank 

nv Nuon Energy Trade & Wholesale 

Nykredit Bank A/S 

Osterreichische Volksbanken-Aktiengesellschaft 

Oversea-Chinese Banking Corporation Limited 

Piraeus Bank S.A. 

PNC Bank, N.A. 

Pohjola Bank plc 

Rabobank Nederland 

Raiffeisen Zentralbank Austria AG 

Regions Bank 

Renaissance Capital 

Resona Bank, Ltd. 

Royal Bank of Canada 

The Royal Bank of Scotland plc 

RWE Supply & Trading GmbH 

Sal. Oppenheim jr. & Cie KGaA 

Samsung Securities Co., Ltd. 

Santander Central Hispano, S.A. 

Shanghai Pudong Development Bank 

Shinko Securities Co., Ltd. 

Shinsei Bank, Limited 

Shoko Chukin Bank 

Skandinaviska Enskilda Banken 

SMBC Capital Markets, Inc. 

Societe Generale 

The Standard Bank of South Africa 

Standard Chartered Bank 

STASCO 

State Bank of India 

State Street Bank & Trust Company 

Sumitomo Mitsui Banking Corporation 

Sumitomo Trust and Banking Co., Ltd. 

Suncorp-Metway Limited 

SunTrust Robinson Humphrey Capital Markets 

Svenska Handelsbanken (Handelsbanken 

Markets) 

Swedbank AB 

Swiss Re Financial Products 

Sydbank A/S 

Taishin International Bank 

The Toronto-Dominion Bank 

Totsa Total Oil Trading S.A. 

Troika Dialog 

New Members appear in italics 

51


Turkiye Garanti Bankasi A.S. 

UBS AG 

Union Bank of India 

United Bank Limited 

United Overseas Bank Limited 

VTB Bank Europe plc 

Wachovia Corporation 

Wells Fargo Bank 

Westdeutsche Genossenschafts-Zentralbank eG 

WestLB AG 

Westpac Banking Corporation 

XL America, Inc. 

Zurcher Kantonalbank 

Total Primary Members: 210 

ISDA ASSOCIATE MEMBERS 

A & L Goodbody 

Abreu Advogados 

Addleshaw Goddard 

Advokatfirman Hammarskiöld & Co. 

Advokatfirman Vinge KB 

Aird & Berlis LLP 

Akin, Gump, Strauss, Hauer & Feld LLP 

Algorithmics, Inc. 

Ali Budiardjo, Nugroho, Reksodiputro (ABNR) 

Allen & Overy LLP 

Allens Arthur Robinson 

Allustra Limited 

Alston & Bird LLP 

Amarchand & Mangaldas & Suresh A. Shroff 

& Co. 

Anderson Mori & Tomotsune 

Appleby 

APYDOS SA 

Arendt & Medernach 

Arthur Cox Solicitors 

Ashurst 

Atsumi & Partners 

AZB & Partners 

Baker & McKenzie LLP 

Baker Botts L.L.P. 

Bär & Karrer 

Bech-Bruun 

Bell Gully 

Berwin Leighton Paisner 

BGC Brokers LP 

Binder Grosswang Rechtsanwalte 

Bingham McCutchen LLP 

Bird & Bird 

Blackbird Holdings, Inc. 

Blake Dawson 

Blake, Cassels & Graydon LLP 

Bloomberg Financial Markets 

BM&F - Bolsa de Mercadorias & Futuros 

Bond Exchange of South Africa 

Borden Ladner Gervais, LLP 

Bowman Gilfillan Inc. 

Bracewell & Giuliani LLP 

Brown Rudnick Berlack Israels LLP 

Brzobohaty Broz & Honsa v.o.s. 

Buck Consultants, LLC 

Buddle Findlay 

Bulboaca & Asociatii SCA 

Cadwalader, Wickersham & Taft 

Cameron McKenna 

Cardigos e Associados - Sociedade de Advogados 

RL 

Caspi & Co. 

CETIP - Câmara de Custódia e Liquidação 

Chadbourne & Parke LLP 

Chambers of Sir Hamid Moollan Q.C. 

Chatham Financial Corp. 

Chicago Board Options Exchange 

Chiomenti Studio Legale 

City-Yuwa Partners 

Clayton Utz 

The Clearing Corporation 

The Clearing Corporation of India Ltd. 

Cleary, Gottlieb, Steen & Hamilton LLP 

Clifford Chance LLP 

CLS Services Limited 

Clyde & Co. 

CME Group Inc. 

Conyers Dill and Pearman 

Copp Clark Professional 

Corrs Chambers Westgarth 

Covington & Burling LLP 

Cravath, Swaine & Moore LLP 

52


Creditex Group Inc. 

CreditSights, Inc. 

Cuatrecasas Abogados, S.R.L. 

Curtis, Mallet-Prevost, Colt & Mosle LLP 

D. Harris & Co. International Ltd 

Dave & Girish & Co. 

DAVID DOBLE Solicitors 

Davies Ward Phillips & Vineberg 

Davis Polk & Wardwell 

De Brauw Blackstone Westbroek 

De Pardieu Brocas Maffei 

Debevoise & Plimpton LLP 

Dechert LLP 

Denton Wilde Sapte 

The Depository Trust & Clearing Company 

Dewey & LeBoeuf 

Dillon Eustace 

DLA Piper 

DNC Advocates At Work 

Dominion Bond Rating Service Limited 

Donaldson Legal Consulting 

eClerx 

EMC Document Sciences 

Ernst & Young LLP 

Eurex Clearing AG 

Euroclear SA/NV 

EVERSHEDS LLP 

Faegre & Benson LLP 

Field Fisher Waterhouse LLP 

Fitch Ratings Inc. 

Foley & Lardner LLP 

Freehills 

Freshfields Bruckhaus Deringer 

Fried, Frank, Harris, Shriver and Jacobson 

Ganado & Associates Advocates 

Gernandt & Danielsson Advokatbyrå KB 

GFI Group 

Gibson, Dunn & Crutcher LLP 

Gide Loyrette Nouel 

Global Electronic Markets LLC 

GlobeOp Financial Services 

Goodmans LLP 

Goodwin Procter LLP 

Gorrissen Federspiel Kierkegaard 

Gowling Lafleur Henderson LLP 

Grech Vella Tortell & Hyzler-Advocates 

Greenberg Traurig, LLP 

Gross, Kleinhendler, Hodak, Halevy, 

Greenberg & Co. 

Hahn & Hessen LLP 

Harney Westwood & Riegels 

Harry Jho LLC 

Herbert Smith 

Herguner Bilgen Ozeke 

Holman Fenwick & Willan 

Homburger 

Houthoff Buruma 

Hughes Hubbard & Reed 

Hunton & Williams 

IBM Corporation 

ICAP 

Interactive Data Corporation 

IntercontinentalExchange, Inc. 

Japan Credit Rating Agency, Ltd 

Jermyn Capital Partners PLC 

Johnson Winter & Slattery 

Jones Day 

JunZeJun Law Offices 

Juris Corp 

Karatzas & Partners 

Katten Muchin Rosenman 

Kaye Scholer LLP 

Kim & Chang 

King & Spalding LLP 

King & Wood 

Kirkland & Ellis 

Kirkpatrick & Lockhart Preston Gates Ellis LLP 

Kramer Levin Naftalis & Frankel LLP 

Kromann Reumert 

Kutak Rock LLP 

L. Morris Legal 

Landwell 

Latham & Watkins 

LCH.Clearnet Limited 

Lee & Ko 

Lee & Li 

Lenz & Staehelin 

Linklaters Allen & Gledhill Pte Ltd 

Linklaters LLP 

Lombard Risk Systems Ltd. 

London International Financial Futures and 

Options 

Exchange (LIFFE) 

Lovells LLP 

Lowenstein Sandler PC 

Loyens & Loeff 

Mallesons Stephen Jaques 

Mannheimer Swartling Advokatbyra AB 

Maples and Calder 

Marex Financial Limited 

MarketAxess 

Markit Group Limited 

53


Marval O’Farrell & Mairal 

Matheson Ormsby Prentice 

Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga 

Advogados 

Mayer Brown LLP 

McCann FitzGerald 

McCarthy Tétrault LLP 

McClure Naismith 

McDermott Will & Emery LLP 

McKee Nelson LLP 

McMillan Binch 

Meitar Liquornik Geva & Leshem Brandwein 

Meyer Lustenberger Attorneys-at-Law 

MF Global UK Limited 

Milbank, Tweed, Hadley & McCloy 

Misys Banking Systems 

Mitsui Company 

Moody’s Investors Service, Inc. 

Moore & Van Allen PLLC 

Morgan, Lewis & Bockius 

Mori Hamada & Matsumoto 

Morrison & Foerster LLP 

Munsch Hardt Kopf & Harr, P.C. 

Nagashima Ohno & Tsunematsu 

NautaDutilh 

NetDelta LLC 

Newedge Group 

Nishimura & Asahi 

Nord Pool ASA 

Norton Rose LLP 

Novarum Risk Management UK Limited 

NS Solutions Corporation 

NTT Data Corporation 

O’Melveny & Myers LLP 

ODL Securities Limited 

Oesa Limited 

Ogier 

Ogilvy Renault 

Oh-Ebashi LPC & Partners 

Olswang 

Omgeo 

Orrick, Herrington & Sutcliffe LLP 

Osler, Hoskin & Harcourt LLP 

Patton Boggs LLP 

Paul, Weiss, Rifkind, Wharton & Garrison LLP 

Pekin & Pekin 

Peltonen, Ruokonen & Itainen Oy 

Pillsbury Winthrop Shaw Pittman LLP 

Pinheiro Neto - Advogados 

Pinsent Masons 

Plesner Svane Grønborg, Law Firm 

PricewaterhouseCoopers 

Progress Software 

Purrington Moody Weil LLP 

Quick Corp. 

Radar Logic Incorporated 

Rating and Investment Information, Inc. 

Reed Smith LLP 

Reuters 

Richards Kibbe & Orbe LLP 

Ritch Mueller, S.C. 

Rojs, Peljhan, Prelesnik & Partners 

Ropes & Gray 

S.W.I.F.T. sc 

Salans LLP 

Sapient 

Schiff Hardin LLP 

SCHOENHERR RECHTSANWAELTE GMBH 

Schulte Roth & Zabel LLP 

Scrittura, Inc. 

Seward & Kissel LLP 

Shearman & Sterling LLP 

Shearn Delamore & Co. 

Shin & Kim 

Sidley Austin LLP 

Simmons & Simmons 

Simpson Thacher & Bartlett 

Singapore Exchange Limited 

SJ Berwin 

Skadden, Arps, Slate, Meagher & Flom 

Slaughter and May 

Soltysinski, Kawecki & Szlezak 

Sonnenschein Nath & Rosenthal LLP 

Standard & Poor’s 

Stikeman Elliott LLP 

Stroock & Stroock & Lavan LLP 

Sullivan & Cromwell 

SunGard Data Systems Inc. 

Sutherland, Asbill & Brennan LLP 

Taylor Wessing 

Teigland-Hunt & Associates LLP 

Thompson Hine LLP 

Thunderhead Ltd. 

TMI Associates 

Tokyo Financial Exchange (TFX) 

Tokyo Stock Exchange Group, Inc. 

Tradeweb Markets LLC 

Tradition (North America), Inc. 

Travers Smith 

TriOptima 

Troutman Sanders, LLP 

Tullett Prebon 

54


Uria Menendez Abogados, S.L.P. 

Ustariz & Abogados Estudio Jurídico 

Versif INC 

Vinson and Elkins L.L.P. 

VOB-Service GmbH 

Vyapar Capital Market Partners LLC 

Walder Wyss & Partners 

Weil Gotshal & Manges 

WFW Global LLP 

White & Case LLP 

Willkie, Farr & Gallagher LLP 

WilmerHale 

Winston & Strawn LLP 

Wistrand Advokatbyra 

WOLF THEISS Rechtsanwälte GmbH 

Womble Carlyle Sandridge & Rice, PLLC 

Wong Partnership 

Yigal Arnon & Co. 

Yulchon 

Zaid Ibrahim & Co. 

Total ASSOCIATE Members: 290 

ISDA SUBSCRIBER MEMBERS 

Aareal Bank AG 

AB Svensk Exportkredit 

ADI Alternative Investments 

AEGON USA Investment Management, LLC 

African Development Bank 

AGF Asset Management 

Aladdin Capital Management LLC 

Alberta Treasury Branches (ATB Financial) 

Alexandra Investment Management, LLC 

Alliance Capital Management L.P. 

Allstate Investments, LLC 

Ambac Financial Group, Inc. 

American Electric Power Service Corporation 

American Express Company 

American Honda Finance Corporation 

Ameriprise Financial, Inc. 

AMVESCAP plc 

Anchorage Advisors, L.L.C. 

Ares Management LLC 

Artradis Fund Management Pte Ltd 

Asian Development Bank 

Athilon Structured Investment Advisors, LLC 

Austrian Federal Financing Agency (AFFA) 

Aviva Investors Global Services Limited 

AXA BANK EUROPA SA 

AXA Investment Managers 

B. Metzler seel Sohn & Co. KGaA 

Babcock & Brown 

Baillie Gifford & Co. 

Banco de Portugal 

Bank for International Settlements 

Bank Nederlandse Gemeenten, nv 

Bank of Canada 

Bank of England 

The Bank of Fukuoka, Limited 

The Bank of Kyoto, Ltd. 

Bank of Lithuania 

Banque De France 

Banque et Caisse d’Epargne de l’Etat, 

Luxembourg 

The Baupost Group, L.L.C. 

BBT Fund L.P. 

Beijing Gao Hua Securities Company Limited 

BG Group Plc 

BlackRock Financial Management 

BlueCrest Capital Management LLP 

BlueMountain Capital Management, LP 

Bradford & Bingley plc 

Brevan Howard Asset Management LLP 

Bridgewater Associates, Inc. 

British Energy Trading and Sales Limited 

Brown Brothers Harriman & Co. 

Bunge SA 

Business Development Bank of Canada 

Cairn Financial Products Limited 

Caisse Centrale Desjardins 

Caisse de depot et Placement du Quebec 

Caisse des Dépôts 

California Department of Water Resources - 

Electric Power Fund 

California State Teachers’ Retirement System 

(CalSTRS) 

Canada Mortgage and Housing Corporation 

Canada Pension Plan Investment Board 

Canyon Capital Advisors LLC 

Capital Group International, Inc. 

55


Capital One Financial Corp. 

Cassa Depositi e Prestiti S.p.A. 

Central Bank of the Russian Federation (Bank 

of Russia) 

Channel Capital Advisors LLP 

Chevron Corporation 

Cheyne Capital Management (UK) LLP 

China Development Bank 

Citadel Investment Group, L.L.C. 

Co-Operative Financial Services Limited 

Cobelfret SA 

Conectiv Energy Supply, Inc. 

Convexity Capital Management LP 

COREALCREDIT BANK AG 

Council of Europe Development Bank 

Countrywide Financial Corporation 

CQS (UK) LLP 

D.E. Shaw & Co., L.P. 

DekaBank Deutsche Girozentrale 

Depfa Deutsche Pfandbrief Bank AG 

Deutsche Postbank AG 

DKR Capital Inc. 

Drax Power Limited 

DTE Energy Trading, Inc. 

Dunbar Bank Plc 

Dutch State Treasury Agency 

E.ON Energy Trading AG 

EADS NV 

Eksportfinans ASA 

Electrabel NV/SA 

Electricite de France 

Elektrizitaets-Gesellschaft Laufenburg AG 

(EGL AG) 

Ellington Management Group, L.L.C. 

Endesa Italia SpA 

Endesa, S.A. 

Enel SPA 

Energie Ouest Suisse (EOS) 

Eni S.p.A. 

Eskom Holdings Limited 

Essent Energy Trading B.V. 

Eton Park Capital Management, L.P. 

EUROFIMA 

European Bank for Reconstruction & 

Development 

European Investment Bank 

Export Credits Guarantee Department 

Export Development Canada 

The Export-Import Bank of China 

F&C Management Limited 

Fairfax Financial Holdings Limited 

Federal Home Loan Bank of Atlanta 

Federal Home Loan Bank of Boston 

Federal Home Loan Bank of Chicago 

Federal Home Loan Bank of Cincinnati 

Federal Home Loan Bank of Dallas 

Federal Home Loan Bank of Des Moines 

Federal Home Loan Bank of Indianapolis 

Federal Home Loan Bank of New York 

Federal Home Loan Bank of Pittsburgh 

Federal Home Loan Bank of San Francisco 

Federal Home Loan Bank of Seattle 

Federal Home Loan Bank of Topeka 

Federal Home Loan Mortgage Corporation 

(Freddie Mac) 

Federal National Mortgage Association 

(Fannie Mae) 

Fidelity Investments Money Management, Inc. 

Fifth Third Bank 

FIL Limited 

Florida State Board of Administration 

FMC Corporation 

Fonds de Réserve pour les Retraites 

Ford Motor Credit Company 

Friesland Bank N.V. 

Gas Natural sdg, S.A. 

Gazprom Marketing & Trading Ltd 

General Electric Capital Corporation 

General Re Financial Products Corp. 

Genworth Financial 

Glencore International AG 

GLG PARTNERS LP 

Gordian Knot Limited 

Government Debt Management Agency Private 

Company Limited by Shares (Hungary) 

Government of Canada, Department of Finance 

Government of Singapore Investment Corporation 

Pte Ltd 

Greywolf Capital Management, LP 

Gunvor International BV, Amsterdam, Geneva 

Harvard Management Company, Inc. 

HBK Services LLC 

Henderson Global Investors Limited 

Highbridge Capital Management, LLC 

Howard Hughes Medical Institute 

Hypo Alpe-Adria Bank International AG 

III Offshore Advisors 

Indian Oil Corporation, Limited 

Instituto de Credito Oficial 

Instituto de Gestao de Credito Publico 

Int’l Bank for Reconstruction (World Bank) 

56


Intel Corporation 

Inter-American Development Bank 

International Finance Corporation 

Ionic Capital Management LLC 

IXIS Asset Management 

J&S Group Limited 

J. R. Simplot Company 

Japan Post Bank Co., Ltd. 

John Hancock Financial Services 

The Joyo Bank, Ltd. 

The Juroku Bank Ltd 

KAS Derivaten Clearing N.V. 

KfW 

King Street Capital Management, L.P. 

Kingdom of Belgium 

Kingdom of Denmark 

Kingdom of Sweden 

Kommunalbanken AS 

Kommunalkredit Austria AG 

KommuneKredit 

Kommuninvest i Sverige AB (publ) 

Landesbank Berlin AG 

Landesbank Saar 

Landeskreditbank Baden-Wuerttemberg - 

Foerderbank 

Landwirtschaftliche Rentenbank 

Laurentian Bank of Canada 

Legal and General Investment Management 

(Holdings) Ltd. 

LIM Advisors Limited 

Lombard Odier Darier Hentsch & Cie 

Louis Dreyfus Corporation 

Louis Dreyfus Energy Services L.P. 

M & G Investment Management Limited 

M/S Bharat Petroleum Corporation Limited 

(BPCL) 

Magnetar Capital LLC 

Man Investments Ltd 

Mandatum Life Insurance Company Limited 

Massachusetts Mutual Life Insurance Company 

MBIA Insurance Corp 

McDonald’s Corporation 

MetLife 

MFS Investment Management 

Millennium Partners, L.P. 

Mitsubishi Corporation 

Mitsui Sumitomo Insurance Company Limited 

MKP Capital Management, LLC 

MN Services N.V. 

Moore Capital Management LLC 

Munich Re Capital Markets GmbH 

Municipality Finance Plc 

National Bank of Poland 

National Rural Utilities Cooperative Finance 

Corporation 

National Swedish Pension Fund 

Nationwide Building Society 

Natixis Commodity Markets Limited 

Nederlandse Financierings-Maatschappij voor 

Ontwikkelingslanden N.V. (“FMO”) 

Nederlandse Waterschapsbank N.V. 

New South Wales Treasury Corporation 

New Zealand Debt Management Office 

Newshore Financial Services Inc. 

Nexen Inc. 

Nordic Investment Bank 

Norges Bank 

Northern Trust 

Novartis International AG 

NRW.BANK 

OFI ASSET MANAGEMENT 

OGE Energy Resources, Inc. 

Ontario Financing Authority 

Ontario Teachers’ Pension Plan Board 

Opet Trade (Singapore) Pte. Ltd 

Øresundsbro Konsortiet 

OZ Management, L.L.C. 

Pacific Investment Management Company LLC 

Pacific Life Insurance Company 

Paloma Partners Management Company 

Paulson & Co. Inc 

Perfect Treasure Investment Limited 

Pershing Square Capital Management, L.P. 

Peugeot SA 

Pfizer Inc. 

PGGM 

Pioneer Investment Management Limited 

Portland General Electric 

Primus Asset Management, Inc. 

ProLiance Energy LLC 

Province of British Columbia 

Prudential Global Funding LLC 

PSEG Energy Resources & Trade LLC 

PSolve Asset Solutions 

Public Sector Pension Investment Board 

Putnam Investments 

Quadrant Structured Investment Advisers LLC 

(QSI) 

Québec 

Queensland Investment Corporation 

Queensland Treasury Corporation 

QVT Financial LP 

57


Raiffeisen Switzerland Genossenschaft 

Regiment Capital Management, LLC 

Reliance Industries Limited 

Renault SAS 

Republic of Finland 

Reserve Bank of New Zealand 

S.A.C. Capital Advisors, L.P. 

Sandelman Partners, L.P. 

Sanofi-Aventis 

Saracen Energy Advisors LP 

Saxo Bank A/S 

Schroders plc 

ScottishPower Energy Management Limited 

Shell Asset Management Company B.V. 

(SAMCo) 

Shinkin Central Bank 

Siemens Aktiengesellschaft 

Sierra Pacific Resources 

Sinopec (Hong Kong) Petroleum Company 

Limited 

SK Energy Co., Ltd. 

SNCB Holding 

SNS Bank N.V. 

Sompo Japan Insurance Inc. 

Soros Fund Management LLC 

Sound Capital Management, Inc. 

South African Reserve Bank 

Southwest Gas Corporation 

Sparkasse KoelnBonn 

Standard Life Investments Limited 

Stark Investments 

StatoilHydro ASA 

Stevens Capital Management LP 

Stichting Pensioenfonds ABP 

Stone Tower Capital 

Student Loan Marketing Association 

(Sallie Mae) 

SUEK AG 

Suez Energy Marketing NA, Inc. 

Suez-Tractebel S.A. 

Sumitomo Corporation 

Sun Life Assurance Company of Canada 

Susquehanna Financial Products 

Sveriges Riksbank 

Swedish Housing Finance Corp. 

Swiss National Bank 

Taconic Capital Advisors L.P. 

Telecom Italia SpA 

Telkom SA Limited 

Temasek Holdings (Private) Limited 

Total Capital S.A. 

Toyota Financial Services 

TPG-Axon Capital Management, LP 

Trafigura Derivatives Limited 

TransCanada Pipelines Limited 

Transnet Limited 

Treasury Corporation of Victoria 

Tudor Investment Corporation 

U.S. Bancorp 

Union Bank of California, N.A. 

University of Notre Dame 

The Vanguard Group, Inc 

Vattenfall A.B. 

Vitol SA 

Vodafone Group Services Ltd. 

Volvo Treasury AB 

Webster Bank 

Wellington Management Company, LLP 

Western Australian Treasury Corporation 

Western Bulk Carriers KS 

Westfield Holdings Limited 

Weyerhaeuser Asset Management LLC 

Whitebox Advisors, LLC 

Yorkshire Building Society 

Total SUBSCRIBER Members: 324 

TOTAL ISDA MEMBERS 824 

58

ISDA Conferences & Events 2008 

2006 ISDA Definitions – ISDA Symposium 

2008 ISDA Regional Conference 

A Primer on Documenting Non-Deliverable 

Forwards, Options & Swaps – ISDA and EMTA 

Symposium 

Close-Outs and the Impact of Market Events – 

ISDA Workshop 

Counterparty Credit Risk Seminar 

Covered Bonds and their Documentation – ISDA 

Symposium 

Ethics Issues Confronting Lawyers in the 

Financial Services Industry – ISDA Symposium 

Extending FpML –Advanced Training Course 

FpML Training Course 

Fundamentals of Commodity Derivatives 

Seminar 

Fundamentals of Credit Derivatives Seminar 

Fundamentals of Derivatives Seminar 

Fundamentals of Equity Derivatives Seminar 

Credit Considerations in Equity Derivatives & 

Related Hedging Transactions – ISDA Symposium 

Credit Derivatives Operations Training Course 

Credit Derivatives Workshop 

Documenting and Confirming Credit Derivative 

Transactions Conference 

Documenting and Confirming Equity Derivative 

Transactions Conference 

Documenting and Confirming Exotic Flow Equity 

Derivatives Conference 

Documenting Commodity Transactions using the 

ISDA Documentation Structure Conference 

Documenting Derivatives Transactions in 

Emissions Allowances – ISDA Symposium 

Documenting Interest Rate and Currency 

Swaps – ISDA Symposium 

Energy, Commodities & Developing Products 

Conference 

Equity Derivatives Documentation Workshop 

How to Read ISDA Netting Opinions – ISDA 

Symposium 

Introduction to Operations Training Course 

ISDA Operations Commitments, Solutions and 

Beyond – ISDA Symposium 

Latest Developments in Accounting for Financial 

Instruments 

Litigation in the OTC Derivatives Market 

Loan CDS Documentation – ISDA Symposium 

Property Index Derivative Transactions and ISDA 

Documentation – ISDA Symposium 

Second Generation Credit Derivative 

Documentation Conference 

Understanding Collateral Arrangements and the 

ISDA Credit Support Documents Conference 

Understanding the ISDA Master Agreements 

Conference 

Variance Swaps and their Documentation 

Conference & Event Locations 2008 

The above conferences were held variously in these cities during 2008: 

Athens 

Beijing 

Boston 

Chicago 

Dublin 

Frankfurt 

Greenwich 

Hong Kong 

Kuala Lumpur 

London 

New York 

Paris 

Prague 

San Francisco 

Shanghai 

Singapore 

Stockholm 

Sydney 

Taipei 

Tokyo 

Toronto 

59

Copyright © 2009 by 

International Swaps and Derivatives Association, Inc. 

360 Madison Avenue 

16th floor 

New York, NY 10017

ISDA 200

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