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Managed Funds Association sees progress on equity finance share swaps

The Managed Funds Association, which represents US alternative managers, has announced that its collaboration with the International Swaps and Derivatives Association has yielded success in defining standard terms for a new equity finance share swap template agreement.

The new agreement takes into account the derivatives user's perspective, and reflects significant input from MFA members representing the hedge fund industry, the association says.

The MFA and ISDA have worked together for the past nine months to standardise terms for equity finance share swaps that reference a European underlier, as part of a larger document, the ISDA's 2007 European Master Equity Derivatives Confirmation Agreement. The organisations are seeking to facilitate the negotiation of master confirmation agreements and improve operational efficiencies for key equity derivatives products.

'The MFA, along with several of our members representing the hedge fund industry, was a participant in the ISDA working group that developed this template document and originated several changes to the agreement in order to address buy-side concerns and views,' says MFA president John G. Gaine.

'Our group worked successfully with the dealer community to implement constructive improvements that will help to reduce confirmation backlogs and promote operational efficiency in this important market. We encourage our members to review the new document closely, with counsel, and to contact us with any questions.'

To assist its members in assessing how to review and use the new agreement, the MFA has announced plans to produce a brief user's guide for the equity finance share swap agreement.

The MFA, which has its headquarters in Washington, DC and an office in New York, draws its membership from professionals active in hedge funds, funds of funds and managed futures funds. Established in 1991, the association acts as a lobbying group and an advocate for sound business practices and industry growth.

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