Credit Market Trade Group Drafts Privacy Principle

NEW YORK (HedgeWorld.com)–A group of trade associations concerned with the credit and credit derivatives markets issued an exposure draft of principles regarding the handling and use of material nonpublic information in the managing of credit risk.

The group, known as the Joint Market Practices Forum, said in a statement May 22 that inadequate controls on the use of material nonpublic information, or the public perception of inadequate controls, threatens to erode confidence in the integrity of the credit market, which would also hurt liquidity and efficiency.

The four groups participating in the forum are: the Bond Market Association (which consists of securities firms and banks that underwrite, trade and sell debt securities); the International Association of Credit Portfolio Managers (a professional association dedicated to the advancement of credit portfolio management); the International Swaps and Derivatives Association (which consists of leading participants in the privately negotiated derivatives industry); and the Loan Syndications and Trading Association (for the corporate loan market).