Isda issues guidelines on counterparty transfers

The International Swaps and Derivatives Association (Isda) has published guidelines to deal with cases where two parties have entered into one or more transactions and where one of the parties transfers its rights and obligations to a new counterparty.

The document, called the 'novation agreement', should promote greater efficiency in the privately negotiated over-the counter derivatives business.“Development of the novation agreement was a high priority for the Isda operations committee,” said Robert Pickel, chief executive of Isda. “The backlogs in documentation of novations and assignments should be greatly reduced along with the time spent on completing these agreements and the documentation cost.”