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Comparison of CDS Clearing Proposals for ISDA

Background

One of the key functions and roles that ISDA performs and delivers to its members is continuous education and frequent updates as to the developments in the OTC market space.  ISDA have partnered with Adsatis to collect and assemble a complete picture of the service offerings available for clearing CDS contracts.

 

The purpose of this survey is to allow a side by side comparison of each of the clearing solutions for CDS contracts.  This will help ISDA members to identify the key differences between the solutions and to understand the differing requirements of each option. 

 

Each of the organisations developing a clearing solution was asked to respond to a survey detailing how their solutions will work.  These responses, together with the other documentation collated, were used to build a comparison table detailing the solutions available.  This comparison table also provides references to the source documentation to allow more detailed investigation and evaluation by ISDA members. Both the comparison table and the detailed survey responses/reference documentation are accessible via the links below. 

 

The survey covers the legal structures and governance of each organisation, the products and high level processes being applied, the margining and risk management approach and pricing.

 

Responses have been received from CME, ICE, Eurex and NYSE Liffe. In addition, recent announcements have been made that LCH.Clearnet SA is planning to launch CDS clearing based in the Euro zone leveraging its partnership with NYSE Liffe, and Japanese market participants have asked the JSCC to develop a solution in the Japanese CDS market. Plans for these initiatives are not as well advanced as those covered in this survey.