The International Swaps and Derivatives Association (ISDA) and the Futures Industry Association (FIA) have released a new agreement for cleared derivatives execution in Europe in 2017.
The 2017 ISDA/FIA Europe Cleared Derivatives Execution Agreement is designed to establish a streamlined, standardized approach to the execution of cleared derivatives contracts. The agreement sets out the terms and conditions for executing trades in a manner that meets the requirements of both regulatory authorities and market participants.
The agreement includes provisions for the execution of trades across multiple platforms, as well as a framework for the operation of execution venues. It also provides guidance on the management of risk during the execution process, including measures for reducing the risk of erroneous trades and ensuring the integrity of market data.
Importantly, the agreement establishes a mechanism for resolving disputes between market participants, ensuring that any conflicts can be resolved quickly and fairly. This should help to promote trust and confidence in the cleared derivatives market, encouraging greater participation from both buyers and sellers.
The 2017 ISDA/FIA Europe Cleared Derivatives Execution Agreement builds on earlier agreements that have been developed by the organizations in response to increasing regulatory pressure in the wake of the financial crisis. It represents a significant step forward in the development of a more transparent and efficient framework for the execution of cleared derivatives contracts, and should help to further improve the overall stability of the financial system.
Overall, the 2017 ISDA/FIA Europe Cleared Derivatives Execution Agreement is an important milestone in the ongoing evolution of the cleared derivatives market. By establishing clear standards for execution and dispute resolution, it should help to ensure that this market continues to operate smoothly and efficiently, promoting greater liquidity, lower costs, and greater stability for all participants.