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Cusip numbers applied to Market Agreed Coupon (MAC) contracts

13 December 2013  |  1923 views  |  0 Source: Sifma

The Securities Industry and Financial Markets Association's (SIFMA) Asset Management Group (AMG) and the International Swaps and Derivatives Association (ISDA), working in collaboration with CUSIP Global Services, have developed CUSIP numbers for the Market Agreed Coupon (MAC). MAC Contracts were developed jointly by SIFMA AMG and ISDA in April 2013.

SIFMA AMG and ISDA believe the establishment of CUSIP numbers, a standardized method for identifying MAC contracts, will facilitate trading and transparency in the interest rate swaps marketplace. CUSIPs will enhance the operational efficiency of these important new tools, assist in position collapsing, and streamline communications between market participants. Asset managers, futures commission merchants, banks, swap execution facilities, and swap data repositories will all benefit from the use of CUSIPs.

MAC Contracts are interest-rate swap (IRS) contracts with pre-defined, market-agreed terms, including start and end dates, payment dates, fixed coupons, currencies and maturities. They are available for use by all swap counterparties on a voluntary basis. SIFMA AMG and ISDA developed the MAC contract to further improve price transparency and promote liquidity in the IRS market. It is also expected to enhance the ability of buy-side market participants to engage in portfolio compression. The use of MAC swaps is meant to compliment "par" fixed rate swaps and bespoke, customized swaps.

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