ISDA Opens South East Asia Office in Singapore.

Business Editors

SINGAPORE--(BUSINESS WIRE)--Oct. 23, 2000

The International Swaps and Derivatives Association (ISDA) today formally opened a full-service office in Singapore, its first in the South East Asia region.

The new office will support ISDA's increasing involvement in the region through its Hong Kong and South East Asia Steering Committee, as well as through a variety of subcommittees. It will enable the Association to better serve the growing number of member firms based in South East Asia, including those in Australia and India, as well as the many other ISDA members who have operations in the region. The office is headed by Angela Papesch, Director of South East Asia Policy, who formerly served as Assistant Director for European Policy in ISDA's London office.

"ISDA's launch of a full-service office in Singapore reflects the global nature of our business, and it underscores both the growth of our membership and of derivatives and risk management activities throughout South East Asia," said Richard E. Grove, Executive Director and Chief Executive Officer of ISDA.

The Association marked the event in Singapore with a reception for members, other industry participants and policymakers that followed a day-long conference on e-commerce and other key issues in the derivatives and risk management business. Concurrent with the office launch, ISDA is also co-sponsoring, along with The Thai Central Bank, a meeting of members and industry participants in Bangkok to discuss collateral management and related issues for local participants.

The Singapore office opening marks ISDA's fourth full-service office, joining those of London, New York and Tokyo. ISDA's Tokyo office, which opened in April 2000, will continue to serve both Japanese and non-Japanese members that have operations in Japan. ISDA will maintain its current representative office in Hong Kong.

The address and contact information for ISDA's Singapore office is: 1 Robinson Road, No. 18-00 AIA Tower, Singapore 048542; Phone [phone]; Fax [phone].

ISDA is the global trade association representing leading participants in the privately negotiated derivatives industry. ISDA was chartered in 1985, and today has more than 500 member institutions from 37 countries on five continents. These members include most of the world's major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the association's web site, www.isda.org.

FAQs ON THE INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION AND THE DERIVATIVES BUSINESS

What is ISDA?

The International Swaps and Derivatives Association, or ISDA, is the global trade association representing the leading participants in the privately negotiated or over-the-counter (OTC) derivatives industry. Chartered in 1985, ISDA's members include most of the world's major institutions who deal in, as well as leading end-users of privately negotiated derivatives.

What is ISDA's mission?

ISDA's primary purpose is to encourage the prudent and efficient development of the privately negotiated derivatives business by:

- Promoting practices conducive to the efficient conduct of the business,
including the development and maintenance of derivatives documentation.

- Promoting the development of sound risk management practices.

- Fostering high standards of commercial conduct.

- Advancing international public understanding of the business.

- Educating members as well as outside audiences on legislative, regulatory,
legal, documentation, accounting, tax, operational, technological and other
issues affecting them.

- Creating a forum to analyze, discuss and represent the common interest of its
members on the above issues and developments.

How many members does ISDA currently have? Are there different types of membership?

ISDA currently has over 500 members, which fall into three categories: Primary, Associate and Subscriber. Primary membership is designed for investment, merchant or commercial banks or other corporations, partnerships or business organizations that, as part of their businesses, deal in derivatives beyond the sole purpose of risk hedging or asset or liability management. Associate membership is designed for professional service firms, including legal, accounting, consulting firms and software providers who are active in the business. Finally, subscriber membership is designed for corporations, financial institutions, government entities and others who use privately negotiated derivatives to better manage financial risks.

Who are ISDA's members in the South East Asia and Hong Kong region?

Primary: (Australia) Australia and New Zealand Banking Group, Ltd.; Commonwealth Bank of Australia; Westpac Banking Corporation; National Australia Bank Limited; Macquarie Bank Ltd.; St. George Bank Ltd. (Malaysia) Arab-Malaysian Merchant Bank Berhad; BSN Commercial Bank Berhad; Commerce International Merchant Bankers Berhad (Singapore) DBS Bank (The Development Bank of Singapore Ltd.); United Overseas Bank Limited; Oversea-Chinese Banking Corporation Limited; Overseas Union Bank Limited.

Associate: (Australia) Australian Financial Markets Association; Mallesons Stephen Jaques (India) Fixed Income Money Market and Derivatives Association of India; Udwadia, Udeshi & Berjis (Singapore) Allen & Gledhill (Taiwan) Lee & Li.

Subscriber: (Australia) Treasury Corporation of Victoria; New South Wales Treasury Corporation; WMC Resources Ltd.; Queensland Treasury Corporation; Western Australian Treasury Corporation; Australian Office of Financial Management; Queensland Treasury Corporation (New Zealand) New Zealand Debt Management Office (Singapore) Government of Singapore Investment Corporation Pte Ltd.

When is ISDA's new Singapore office scheduled to open?

ISDA will open its first full-service office in Singapore on October 23, 2000. The address is 1 Robinson Road, No. 18-00 AIA Tower, Singapore 048542; Phone [phone]; Fax [phone].

Why is ISDA opening an office in Singapore?

ISDA decided to open a full-service office in the region in response to the strong recovery of the Asian markets from the financial crises of recent years and the continuing dramatic growth in the derivatives markets throughout the region. Specifically, the office will support the Association's South East Asia and Hong Kong Steering Committee and a variety of subcommittees, as well as the growing number of member organizations throughout the Asia-Pacific region, including Australia and India.

Where else does ISDA have offices?

The new office in Singapore will be ISDA's fourth full service office, joining current full-service offices in New York, London and Tokyo, as well as a representative office in Hong Kong.

Who is the press contact for the Singapore office?

Press inquiries may be directed to Angela Papesch, who will head the office as Director of South East Asian Policy. Papesch previously served for four years as Assistant Director for European Policy in ISDA's London office.

What is an OTC derivative?

A derivatives transaction is a bilateral contract or payments exchange agreement whose value derives from the value of an underlying asset, reference rate or index. As its name suggests, an OTC derivative is a privately negotiated contract provided directly by dealers to end-users, as opposed to the standardized contracts sold on exchanges.

What are the different types of OTC derivatives?

Today, the underlying asset, rate or index upon which OTC derivatives are based include interest rates, currencies, equities, energy, insurance, commodity, weather and telecommunications.

How large is the OTC derivatives business?

According to the Bank for International Settlements (BIS) survey of OTC derivative transactions, the total estimated notional amount of outstanding OTC derivative contracts stood at $80 trillion at end-December 1998. ISDA reported in its 1999 year-end market survey that the combined total of outstanding interest rate swaps, currency swaps and interest rate options stood at $58.265 trillion in notional principal at December 31, 1999. It is important to realize that the notional amount outstanding of derivatives does not indicate the amount of risk involved in such transactions; the market risk of derivatives outstanding is about 1% to 3% of the notional amount.

Who uses OTC derivatives and why?

The participants in derivatives activity are divided into two groups: end-users and dealers. End-users consist of corporations, governmental entities, institutional investors and financial institutions. Dealers consist mainly of banks and securities firms, but insurance companies and highly rated corporations have joined on in recent years.

Derivatives allow end-users and dealers to identify, isolate and manage separately the fundamental risks and other characteristics that are tied together in traditional financial instruments. End-users utilize derivatives to lower funding costs, enhance yields and diversify sources of funding, as well as to hedge and express market views through position taking.