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Page last updated
February 15, 2003

ISSN No:1470-5494 All rights reserved. No part or portion of this publication may be reproduced or transmitted in any form without the express, prior and written permission of the publisher. Whilst every effort has been made to ensure accuracy, the publisher accepts no responsibility for any person acting as a result of the content herein.



ISDA and OTC Derivatives Industry Respond to 11 September 2001


The International Swaps and Derivatives Association (ISDA), like many other institutions and associations, struggled to deal with the shock of the horrific events that unfolded on September 11, 2001. The thoughts and prayers of ISDA's Board of Directors and its staff continue to be with the families, friends and colleagues of those who were victims of this terrible tragedy. Like many Americans and people throughout the world, the OTC derivatives industry is united in efforts to work together to overcome the events of September 11, 2001.

After the impact of the terrorism was realized, ISDA immediately began facilitating industry discussions focusing on the impact of the closure of the U.S. equity markets, settlement and valuation, and documentation and legal issues.

These meetings commenced at ISDA's Member Update in London and were also held in New York and Tokyo. The first meeting drew more than 400 ISDA members representing derivatives dealers and their legal counsel in talks to identify and resolve derivatives industry issues that may have arisen in the aftermath of the terrorist attacks in the United States. Channels of communication with regulators were also opened during this period.

The OTC derivatives industry clearly united in efforts to work together to identify and resolve issues affecting the functioning of the derivatives markets.

These industry discussions resulted in ISDA's issuance of its "Best Practice Statement for Certain Energy Products," (http://www. isda.org/press/press091401.html), addressing the market situation for energy products utilizing NYMEX and Platt's prices, which failed to announce prices for a period of time after the September 11 attack.

ISDA also issued a "Statement on Equity Derivative Transactions" (http://www.isda org /press/pdf/clarification_statement .pdf) providing guidance on the treatment of valuation and expiration of options for Tuesday (9/11), Wednesday (9/12), Thursday (9/13) and Friday (9/14). Additionally, ISDA established an information clearinghouse on its web site for disaster recovery and alternative notice addresses at http://www.isda.org/ event/infoevent.html, posted useful links at http:// www.isda.org /event/usefullinks.html and issued the various statements discussed above regarding market practice issues on its main web site: www.isda.org.

By Monday, September 17, the U.S. Dollar swap rates on Reuters page ISDAFIX3 were again listed in various publications of the Board of Governors of the Federal Reserve System, including its H.15 Daily Update. ISDA focused on the increased importance of supporting orderly markets and considered the continuing publication of the 11:00 a.m. and 3:00 p.m. fixings of U.S. Dollar ISDAFIX to be a meaningful market contribution.

The OTC derivatives markets have remained strong, sound and stable throughout this difficult period. This success has only been achievable through the combined efforts of our membership, regulators and others in the financial industry who remain committed to the smooth functioning of the derivatives markets in the aftermath of September 11, 2001.


Robert Pickel
Executive Director & Chief Executive Officer
The International Swaps & Derivatives Association






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