The International Swaps and Derivatives Association (ISDA) -the global representative body for the $197,100bn over-the-counter (OTC) derivatives market - closed 2003 by setting out an ambitious strategic three-year plan for the industry. By 2005, the body said, the professional marketplace should have achieved full trade automation of the major derivatives product classes. By 2006, banks should also have systems in place that could undertake cross-product matching and netting of cashflows across all OTC transactions for any settlement date. ISDA believes that the automation of trade processing will reduce operational risk by facilitating straight-through-processing (STP), bi-lateral settlement reconciliation and collateral matching within agreed timeframes.
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