AMF Swaps Initiative Implementation Update

Since the July 26 Swaps Conference, the AMF has followed up with several items that relate to its Best Practices Initiative. On August 10th, the AMF met with custodians in Boston to further discuss how the recommendations relate to their business activities. As a result of the meeting, the AMF Swaps Committee will continue to focus on five specific areas:



Also, ISITC is forming working groups to develop minimum data requirements and processing guidelines for communication between custodians and asset managers relating to some of these areas.


The Swaps Committee will also form a Dealer subcommittee which will immediately focus on the "plain vanilla" trade confirmation process (Best Practice Recommendation (BRP) # I) including the need for asset managers to submit timely their allocations and the need for dealers to issue electronic confirmations on trade date. Resolving delays in the confirmation process will mitigate regulatory concerns and will improve measurably the accuracy and timeliness of down-stream processing.


The AMF initiated the formation of the oversight group, namely the Swaps Industry Governance Group, to coordinate and review proposed implementation solutions of the AMF Best Practice Recommendations to ensure that the solutions conform to standard data elements and messaging protocols adopted by the swaps industry. Participant members in the Group include: AMF, The Bond Market Association, ISITC, ISDA/FpML, FPL-FIX, ISO-SWIFT and the Data Standards Working Group.


Furthermore, since the AMF recommendations relate to investments, a Chief Investment Officers Advisory Group will be formed such that the Swaps Committees can seek the advice of the CIOs on swaps investment issues and proposed implementation solutions.


Click here to view the AMF Best Practices White Paper


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Note: On September 15, 2005, according to published reports, the Federal Reserve Bank of New York plans to meet with some of the major securities firms and regulators to discuss practices in the credit derivatives market. It was noted recently in the press that while derivative trading volumes have increased significantly, it is important that derivatives operations and processing keep up with market growth. The AMF and the Senior Executives Group will continue to monitor developments.