Industry is Meeting its Goals for CDS Advancements
Report on March 8th Conference Call
In a special industry conference call sponsored by the Asset Managers Division, in cooperation with the Managed Funds Association, the Major Dealers raised the industry's awareness on CDS advancements. The Major Dealers reported that in January, the amount of unsigned confirmations had been reduced by more than 50%, which surpassed the dealers' initial goals. Also, the industry has made significant progress toward using automated matching services to expedite CDS and IRS processing.
Throughout the next eight months, the Major Dealers will continue to work with the buyside to achieve a "steady state" to improve industry infrastructure and practice. The industry can expect that dealers and their clients will work together to match the economics of a swap early in the trade lifecycle, thereby mitigating risk. In this regard, the industry will work toward meeting standard timeframes for matching confirmations.
The industry will also work toward creating and utilizing a central trade information warehouse by DTCC, which will record information on confirmed CDS trades and has the potential to drive downstream automation. For asset managers, a trade information warehouse will help in the tracking and netting of payments.
It was noted that this joint dialogue between the Major Dealers and the AMD and MFA represents a new paradigm by which the industry can work together to quickly improve market practices and reduce risk.
Click here to listen to the March 8th Industry Awareness Conference Call
SEC and NASD Participate in Industry Discussion on Pandemic Preparations
On March 1, 2006, The Bond Market Association hosted a meeting with over 70 BCP professionals in response to questions pertaining to industry-wide communications in the event of a pandemic. At this meeting, representatives from Lehman Brothers offered a demonstration of a prototype for a directory of industry professionals.
Representatives from the SEC and NASD participated in the meeting and are interested in the industry's preparedness efforts. This is particularly relevant since the SEC indicated at a recent conference - "SEC Speaks" - that it will be looking to ensure that firms are in compliance with its 2003 document, "Interagency Paper on Sound Practices to Strengthen the Resilience of the U.S. Financial System."
The Technology Committee of The Bond Market Association, chaired by Dexter Senft of Lehman Brothers, will continue to work with the Association's Business Continuity Management Council, chaired by Peter Poulos of Credit Suisse, to ensure that the industry is prepared and can communicate in the event of a pandemic. The Bond Market Association is also looking into the relevant legal and regulatory questions associated with this type of emergency.
Please contact Joseph Sack at 646-637-9265 to become involved in the Association's BCP activities.
Swaps Compliance Lunch & Learn
The AMD and AMF are pleased to announce that SimCorp will sponsor an AMF Lunch & Learn event which will focus on compliance with investment guidelines and risk management for swaps on March 23, 2006. This interactive Lunch & Learn in New York City will include a presentation of compliance and risk management concepts outlined in the best practices recommendations. The instruments covered in the discussions are interest rate swaps, credit default swaps and total return swaps. Please contact Elisa Nuottajarvi at 646.637.9266 for questions relating to this event.
Click here for more information