ISDA has today published two whitepapers developed by ISDA Future Leaders in Derivatives (IFLD), its professional development program for emerging leaders in the derivatives market.
ISDA launched the IFLD program in October 2021, with an initial cohort of nearly 50 individuals drawn from buy- and sell-side institutions, law firms and service providers around the world.
The participants have worked in two groups to explore key issues for the derivatives market – environmental, social and governance (ESG), and technology and innovation.
The ESG working group’s whitepaper, Sustainability-linked Derivatives: Where to Begin?, identifies sustainability-linked derivatives (SLDs) as a key means by which the derivatives market can support the transition to a sustainable economy. Building on previous ISDA whitepapers, the IFLD provides an overview of key issues that are relevant to SLDs, including regulation, risk, documentation, key performance indicators and data management.
The technology and innovation working group’s whitepaper, The Future of Derivatives Markets: A Roadmap for Innovation, identifies key opportunities for technological innovation in the derivatives market using a series of metrics. Based on this prioritization, it sets out strategic roadmaps for how distributed ledger technology and digital assets could be used to bring greater efficiencies to trade reporting and collateral management.
“The IFLD has provided a terrific platform for emerging leaders to bring their valued perspectives to the future development of the derivatives market. Since we launched the program last year, participants have worked diligently to develop thought leadership in these two crucial areas. These whitepapers will make a significant contribution to two important issues for the future of derivatives market. I congratulate the future leaders on this important milestone and look forward to further contributions from this program in the future,” said Scott O’Malia, ISDA’s Chief Executive.
“The transition to net zero and a sustainable economy is an urgent challenge. The development of a robust market in SLDs can play an important role in supporting this transition. We hope our paper will serve as a useful resource for anyone seeking to understand the key issues that will drive the growth and success of this market,” said Sinead Beacom, Vice President at FinTrU, representing the ESG working group.
“Innovative new technologies have the potential to radically transform derivatives markets. However, there continues to be uncertainty over where the industry should focus. Our paper seeks to address this challenge by setting out a practical roadmap for delivering on the promise of new technology and fostering greater innovation across key areas within the derivatives market,” said Mae Yen Teoh, Counsel at Clifford Chance, representing the technology and innovation working group.
Following the publication of the whitepapers, participants in the IFLD program will now participate in a series of training and educational sessions before leaving the program. Nominations for a second group of IFLD participants will open later this year.
Read the IFLD paper, Sustainability-linked Derivatives: Where to Begin? here.
Read the IFLD paper, The Future of Derivatives Markets: A Roadmap for Innovation, here.