Earlier today, the International Swaps and Derivatives Association (ISDA) sponsored a webinar, “The Foundations of an Efficient Market Infrastructure,” that focused on an initiative by ISDA’s Market Infrastructure and Technology Committee to facilitate the adoption of emerging technologies (DLT, smart contracts)into the trading, documentation and processing of derivatives.

The focus of the conference was on derivatives processing and reporting; however, the issues that plague derivatives are relevant to many other financial market processes and activities.  Specifically, the primary challenge with respect to derivatives – a strained infrastructure that is too costly and inefficient to be sustainable – is common throughout the financial markets.  Or, put  differently, the development of technological solutions within the derivatives sector has the potential to become a template for the resolution of similar issues in other sectors of the financial marketplace.  For this reason, today’s webinar may have an appeal that is broader than market participants with an interest in the process of derivatives.

The remainder of this message contains a summary of the information discussed at this informative webinar.
Continue Reading Summary: ISDA Webinar on the Use of DLT and Smart Contracts in Market Infrastructure for Derivatives Processing

On October 22, 2015, the prudential banking regulators (which includes the OCC, FDIC and the Federal Reserve Board) approved the final version of the non-cleared swap margin rule (available here). We will be considering many aspects of this rule in a series of postings, but in this posting we focus on a single discrete issue:

Whether a money market mutual fund (“MMF”) constitutes eligible collateral that can be posted in respect of a non-cleared swap. 

The answer, of course, is it depends. In sum, a MMF will constitute eligible collateral, as long as the following conditions are met:
Continue Reading Margin on Non-Cleared Swaps – Are Money Market Funds Eligible Collateral?