“In other markets in which standardized definitions have been introduced, it has been clear that liquidity and efficiency have been enhanced as standardized contracts allow for speedier trades with less negotiation,” says Kimberly Summe, general council at Isda in New York.
Summe says that some dealers had already begun to transact using confirmation drafts in advance of the final definitions. “We expect that these definitions and confirmation forms will be adopted by the industry immediately and that the vast majority of trades in the future will use standard Isda definitions,” she says.
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