The Cleared Derivatives Execution Agreement is a model for clear swap market participants to be used in the negotiation of performance agreements with swap counterparties that will be settled through the U.S. Futures Commission. The memorandum explains the changes between version 1 and version 1.1. The memorandum, as well as the attached memorandum, contains important information on the use of the Cleared Derivatives Execution Agreement, a brief description of the intent of each section of the Cleared Derivatives Execution Agreement, unique for carrying out a cleared swap transaction, and a comparison of the execution procedures. While these equivalency provisions are still under formal review, the industry continues to reflect and discuss how best to move forward and make the equivalency (or analog) decision. OICCO has proposed to play a role in developing a number of principles – perhaps similar to those published by ISDA in August 2013 – and intermediaries in equivalence (and in similar provisions), and ISDA continues to raise awareness and advance these issues. Despite these discussions, this is more than that and so far there has been no formal adoption or comprehensive agreement on a uniform approach to cross-border enforcement and recognition of national laws and regulations on related derivatives. The recently published FIA-ISDA clear derivatives execution agreement is the industry`s first attempt to regulate relations between parties who contract trades for centralized clearing. Michael Beaton, Managing Director of Documentation Risk Solutions, explains the structure of this new legal agreement.
In general, the FIA-ISDA Cleared Derivatives Execution Agreement, published by FIA and ISDA on 16 June 2011, is a model that can be used by participants in the swap-swap markets when negotiating execution agreements with counterparties on area derivatives to be settled. In November last year, the AEMF launched a consultation to review existing RSRs and STIs in relation to reports, in order to clarify the interpretation of the data fields needed to report to central repositories and the most appropriate way to populate them.