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financial trade associations and transparency September 12, 2007

Posted by Bradley in : Uncategorized , trackback

I have an ongoing research interest in financial trade associations as private rule-making and standard-setting bodies and as lobbyists on financial regulation. ISDA is one of the FTAs I am interested in. One important focus of ISDA’s attention is encouraging jurisdictions around the world to recognise netting. Today I noticed that ISDA made a submission a couple of days ago on Proposals to Achieve Confirmation of “Enforceability of Close-Out Netting in Malaysia under the Malaysia Deposit Insurance Corporation Act 2005” to Perbadanan Insurans Deposit Malaysia, the Malaysian Deposit Insurer. PIDM makes it clear that the consultation follows representations by ISDA, and notes the importance of transparency. However, ISDA’s recent submission to PIDM is not generally available, although it is available to ISDA members. Other ISDA comment letters which are not publicly available are comments to the Reserve Bank of India on Derivatives and on Credit Default Swaps. Comment letters to US and EU bodies on the other hand are publicly available. I am intrigued by this contrast: it’s not clear to me whether ISDA’s approach to publication of its comments is driven by deference to the preferences of the bodies to which it makes submissions or by something else. The SEC and EU bodies such as the Committee of European Banking Supervisors (CEBS) publicise responses to their consultation documents and rule-making proposals, whereas PIDM states:

PIDM will collate all the comments received and publish its responses, including any amendments to the draft Regulations and draft Policy Statement, on its website. The draft Regulations will come into force after the normal legislative process.

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