ISDA forms credit derivatives determinations committees as part of hardwiring process

By Angela McDaniels

Tacoma, Wash., March 31 - The International Swaps and Derivatives Association, Inc. announced the composition of its credit derivatives determinations committees on Tuesday.

The committees are part of ISDA's credit-default swap hardwiring process, under which the CDS auction settlement provisions are being incorporated into the 2003 ISDA credit derivatives definitions.

As of April 8, the committees will make binding determinations about whether a credit event has occurred, whether an auction will be held and what obligations are deliverable for purposes of the auction.

There will be one committee for each region, each comprising 10 dealers and five non-dealer (buyside) members.

The dealer group includes the eight largest global dealers and the two largest dealers in the relevant region, measured by reference to CDS trade volumes provided by the Depository Trust and Clearing Corp.

The buyside members are selected at random from ISDA's non-dealer committee, which is made up of hedge funds, traditional asset managers and other non-dealer financial institutions.

Each committee will also include two non-voting dealers, one non-voting regional dealer per region and one non-voting non-dealer member.

The global dealers are Bank of America/Merrill Lynch, Barclays, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase Bank, Morgan Stanley, Royal Bank of Scotland and UBS.

The non-dealers are Elliott Management Corp., Legal & General Investment Management Ltd., Pacific Investment Management Co. LLC, Primus Asset Management, Inc. and Rabobank International.

The dealer and non-dealer voting members are the same for all regions - Americas, EMEA, Japan, Asia Ex-Japan, and Australia/New Zealand.

BNP Paribas and HSBC Bank are the global non-voting dealers for all regions; Societe Generale is the regional non-voting dealer for the Americas, Europe, Japan, and Australia/New Zealand; Standard Chartered Bank is the regional non-voting dealer for Asia Ex-Japan; and Prudential Investment Management is the non-voting non-dealer for all regions.

ISDA is based in New York and represents participants in the privately negotiated derivatives industry.

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