Improving investor confidence with ISO standards


ISO 4914 offers an innovative way to identify and understand certain types of financial products known as OTC derivatives.

In spite of the challenges of 2020, there has been an increase in the confidence of business leaders in the flexibility of their organizations. The index shows that leaders remain cautiously optimistic, with over half (57 percent) of companies in the United Kingdom, the United States, and India expecting improved financial performance this year.  

Organizational resilience is the ability of an organization to anticipate, prepare for, and adapt to progressive change and sudden disruption in order to survive and prosper – abilities that have been tested in the last year. Overall, perceived organizational resilience across organizations increased in 2020, with one-third of businesses (33 percent) having full confidence in their organizations’ resilience, Five percent higher than in 2019.

Many of the organizations surveyed felt that the measures they had implemented before the pandemic was effective and helped them survive, stabilize and start rebuilding, strengthening their confidence in the future. Even though 2020 has been a challenging year for most, many organizations have become more confident after the pandemic.

The study clearly links those who report better financial performance to those who have a better perception of their own organizational resilience.

What is an over-the-counter (OTC) derivative?

An Over- the -counter (OTC) derivative is a two-party contract that is not executed on a regulated exchange or trading venue. A derivative is a financial instrument the value of which is derived from the performance of the underlying asset, such as equities, currencies, interest rates, and materials.

Derivatives are used by companies as a risk management strategy, used to cover commercial risks, and to protect a company’s finances against risks to which it may be exposed. They are also used for speculation, which consists of trying to make a profit on estimates educated about market activity.

What is a UPI?

The Unique Product Identifier (UPI) is introduced as an identification mechanism for OTC derivatives to help G20 regulators aggregate global data on OTC derivatives.

How do the new ISO standards affect over-the-counter derivatives from a consumer point of view?

Aggregation of data into trade repositories may enable authorities to obtain an overview of OTC derivatives markets and activities, by facilitating supervision and surveillance to foster a more stable and effective environment for all market participants and for national and global economies.



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