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ISDA Publishes Collateral Asset Definitions

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NEW YORK (–The International Swaps and Derivatives Association published standardized collateral asset definitions.

In a statement, Robert G. Pickel, chief executive of ISDA, predicted that these tables will “assist the smooth and efficient functioning of collateral arrangements in the derivatives markets and … increase certainty in their interpretation” by standardizing the descriptions for the most commonly used collateral assets in various jurisdictions.

The definitions are structured as a series of tables covering the most commonly used assets in more than 20 jurisdictions, designed for incorporation into any form of collateral agreement, including both the ISDA credit support documentation and non-ISDA forms of collateral agreement.

According to ISDA’s 2003 Margin Survey, collateral use in privately negotiated derivatives transactions and related margined activities, now exceeds US$719 billion, a 70% increase over the amount reported in the 2002 Survey.

ISDA said that it anticipates the publication of future editions of these definitions, updated to reflect changes in the published definitions and to include additional assets.

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