Intense work is going on towards a new edition of the ISDA standard definitions for OTC equity derivatives, due out this year. Nick Fry and Ed Osbaldestin (pictured) of consulting firm Sapient urge the market to do better than the last time, when many opportunities to improve efficiency were missed. They suggest how the new definitions could help the market achieve its regulatory commitments and maximise the potential benefits offered by electronic trade processing.
The next few months will be crucial for the over the counter equity derivatives market. Participants have a once-a-decade chance to clean up and simplify the market’s operating practices, in a way that could make trading more robust and efficient.
At issue is the documentation of trades, and the opportunity to achieve a degree of standardisation that the market has never enjoyed before.
This is not just an optional upside for the market, however....