Thursday, October 29, 2009

ISDA Announces Market Practice Changes for Asia CDS Markets

TOKYO, Thursday, October 29, 2009– The International Swaps and Derivatives Association, Inc. (ISDA) announced today at its 2009 Regional Conference in Tokyo market practice changes to the trading convention for credit default swaps (CDS) in Japan and Asia ex-Japan. These changes, which will go into effect following the December 20 roll, include the adoption of standard coupons and full first coupons in CDS transactions.

Standardization of coupons in Japan and Asia ex-Japan follows similar changes in North America, Europe, Australia/New Zealand, and Emerging markets in the Middle East and Latin America.

“ISDA and the industry have worked extensively throughout the year to achieve increased standardization, transparency and liquidity in the CDS market through the adoption of standard coupons and other market practice initiatives,” said Robert Pickel, Executive Director and Chief Executive Officer, ISDA.

Changes will include the following:

  • Firms will trade Japan CDS with standard coupons of 25bp, 100bp and 500bp and full first coupons going forward
  • Firms will trade Asia ex-Japan CDS with standard coupons of 100bp and 500bp and full first coupons going forward;

The industry successfully adopted fixed coupons in North America in April, in Europe in June and in Emerging Markets in Europe, the Middle East, Latin America and Australia/New Zealand in September.

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