Isda responds to SEC call for CDS regulation

Isda has made a quick response to SEC chairman Christopher Cox's testimony to the Senate Banking Committee, in which he called for immediate regulation of the credit default swaps market.

In a statement soon after, Isda executive director and chief executive officer Robert Pickel said: "During the current market volatility the credit derivatives market has performed very well. It has allowed companies and investors to manage their risks in a time of higher than usual rates of default, and the credit events that have occurred thus far are being settled in an orderly fashion."

"Credit derivatives market participants are the first to encourage the SEC to use its authority to ensure attempted manipulation of these markets is punished," Pickel allowed. "However, proposals which would seek to treat privately negotiated contracts as securities, or otherwise apply ill-fitting regulatory regimes to these agreements, are likely to deter healthy economic activity and push derivatives into markets where the SEC has no jurisdiction."