New ISDA Protocol May Not Fix Business Conduct Bottleneck

Sep 12, 2012

In regards to the new ISDA protocol issued in July 2012, which could potentially give swap dealers the ability to disclose private information to regulators and its subsequent effect on buy-side entities, Jeffrey Robins said, "The external business conduct rules give them [buy-side entities] all sorts of rights they don't currently have – most of which they don't care about, so the protocol waives them. But there may be a couple of things they do care about and don't want to waive. The way the protocol is set up, though, they have to take it or leave it – they get everything or nothing. The only way around it is to individually negotiate it." Robins who contributed to the development of the new protocol added, "We've always known we weren't going to be able to solve everything in the protocol. A standardized process isn't going to work for all situations, so we used the 80-20 rule – if we could provide a solution for 80% of the market, we thought we were doing pretty well."

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