The International Swaps and Derivatives Association, Inc. (ISDA) announced that the Credit Derivatives Determinations Committees (DCs) and ICE Benchmark Administration (IBA) were unable to reach agreement on IBA assuming the role of DC secretary.
As a result, ISDA and the DCs will now pursue other avenues for the transition to a new DC secretary before ISDA’s term as secretary expires in April 2018. All parties are committed to the long-term viability of the credit derivatives market, and will work to ensure a smooth and orderly transition of DC secretary responsibilities.
- ISDA announced in December 2016 that IBA had been selected to act as DC secretary after a public tender. IBA has been negotiating directly with the DCs since the appointment on possible changes to the DC rules.
- The DC secretary is responsible for administrative duties, such as distributing questions submitted by eligible market participants to the relevant DCs, coordinating the timings of DC meetings, and publishing the results of DC votes. The DC secretary does not vote on whether credit events have occurred.
- The DCs have voted to accept various changes to the DC rules in recent in years to ensure the process continues to meet best practices in governance, conduct and transparency. This includes revisions that require DC firms to confirm they have written policies or procedures in place to identify and manage potential conflicts of interest from participation in the DCs.
- As a result of an ongoing process of review to ensure the DC process remains robust, ISDA believes the appointment of an independent, specialist organization to act as DC secretary is a natural next step in the evolution of the process, and will ensure it continues to align with rapidly evolving governance standards.