Isda publishes collateral asset definitions

The International Swaps and Derivatives Association (Isda) published the first edition of the Isda Collateral Asset Definitions this week. The definitions standardise the descriptions for the most commonly used collateral assets in various jurisdictions, which Isda says will reduce operational and legal risks in the use of collateral and provide a more streamlined method for including assets in collateral arrangements.

The collateral asset definitions are structured as a series of tables covering the most commonly used assets in more than 20 jurisdictions. The definitions are designed for incorporation into any form of collateral agreement, including both Isda credit support documentation and non-Isda forms of collateral agreement.

Collateral use in privately negotiated derivatives transactions and related margined activities exceeds $719 billion, Isda says.