DERIVATIVES PLAYERS COMMIT TO SELF-REGULATION
In a letter to various international regulators, large derivatives market participants and ISDA, MFA, and SIFMA committed to several efforts to improve the market’s operational infrastructure for privately negotiated derivatives. Most significantly, the group committed to implement the provisions of ISDA’s Best Practice Guide for Portfolio Reconciliation, which includes weekly portfolio reconciliation, escalation procedures, and reporting.
OUR TAKE: Now that derivatives traders have become the convenient scapegoat for all bad financial events, industry participants are moving to take action to regulate trading before the regulators step in. Portfolio reconciliation and valuation is a good place to start.