ISITC-IOA and The Asset Managers Forum will partner on the Swaps Best Practices Initiative, an effort to improve the efficiency and increase the level of automation in swaps processing.
The swaps market has been growing rapidly, and is expected to continue to do so. Yet most swap trades are still processed manually, with communications conducted via telephone and fax. ISITC-IOA and the AMF agree that improvements in swaps processing are essential if the industry is to keep up with demand, benefit from cost efficiencies, and ensure regulatory compliance.
“The partnership between ISITC-IOA and the AMF makes all kinds of sense,” said Stephen Lachaga of J.P. Morgan Securities Inc., Chair of ISITC-IOA. “Both organizations were looking at the issue independently. By combining forces we can ensure that best practices and standards can be developed more rapidly, and meet the needs of the widest possible group of constituents.”
Exploration of a potential partnership began in the summer of 2004, and continued with meetings in October and December. More details were hammered out this week at a joint meeting during ISITC-IOA’s 11th Annual Industry Forum and Vendor Show in Boston.
While the AMF clearly has the subject matter expertise and domain knowledge where it comes to swaps, ISITC-IOA is known for its experience in designing messages and standards in the ISO world. The ultimate goal is to develop a full standard and register new messages. But the two organizations agreed that there was a need for short-term capabilities to get the process started.
“We’re very glad to have ISITC-IOA as a partner in our Swaps Best Practices Initiative,” added George Hall of Goldman Sachs Asset Management, Chairman of the AMF Swaps Committee. “They bring extensive expertise in the development of standards to the table, and also have particularly strong representation among the custodian banks.”
“We’re pleased and honored to be working with the Asset Managers Forum,” added Lachaga. “This partnership is an extension of what we at ISITC-IOA have always aimed to do internally: collaborate, and look to align constituencies for an optimized outcome.”
The ISITC-IOA is a consortium that works to develop, define, and promote shared standards and practices for the global securities industry. Membership is open to custodian banks, investment management firms, broker-dealers, utilities, and vendors.
The Asset Managers Forum was formed, in cooperation with The Bond Market Association, to give the buyside a unified voice in addressing major securities operations, accounting, legal and regulatory compliance, and market practices initiatives.