ISDA® Equity Derivatives Committee Market Practice Issues
ISDA provides a forum for market practitioners to discuss market events that may have an impact
on the over-the-counter equity derivatives markets. In recent years, market participants have
discussed the following events which are described in detail below:
February 12, 2008: Mercado Oficial de Futuros y Opciones Financieros en España (“MEFF”)
November 7, 2007: London Stock Exchange (“LSE”)
January 2, 2007: U.S. Exchange and Market Closings in observance of former President Ford
January 18, 2006: Temporary Suspension of Transactions at the Tokyo Stock Exchange (TSE)
June 1, 2005: New York Stock Exchange (NYSE) End of Day Trading Halt
June 11, 2004: U.S. Exchange and Market Closings in observance of former President Reagan
February 12, 2008: Mercado Oficial de Futuros y Opciones Financieros en España
(“MEFF”)
Background and Issue
The MEFF, “Related Exchange” for OTC equity derivatives on the IBEX-35 index, experienced a
technological failure on February 12 from approximately 45 minutes prior to the scheduled closing
time up to and including the regularly scheduled closing time (17:35PM CET). The MEFF
subsequently reopened at 17:45PM CET for a 5 minute auction and closed at 18:00PM CET.
During this time the Bolsa de Madrid (“Exchange” for the individual shares in the IBEX-35)
remained open. ISDA understands that market participants in general were restricted from
effecting trades in contracts on the IBEX-35.
ISDA circulated a proposal on 12 February regarding a possible common market approach to the
treatment of affected equity derivatives trades for discussion by equity market participants on
February 13. As with other ISDA market practice discussions following exchange disruptions,
ISDA’s intention in convening market participants was to facilitate the consensus building process
and make appropriate recommendations to industry, in order to provide direction and clarity to the
market.
Summary of ISDA Di