The new confirmations are for weather index puts and weather index calls, which were not previously covered by Isda documents.
Isda has also revised the template for weather index swaps, first published in April this year. The new appendices to the confirmations reference the underlying indexes known as ‘critical-precipitation day’ and ‘cooling-degree day’. These accompany the previously published appendix for the ‘heating-degree day’ index.
“The publication of these documents reflects the growing use and importance of weather derivatives globally,” an association statement said.
Isda is a New York-based trade body that represents active participants in the privately negotiated derivatives industry. Isda said members from Asia, Australia, Europe, Japan and North America had taken part in drawing up its standard form documents for weather derivatives.