WASHINGTON -- The International Swaps and Derivatives Association announced yesterday that it has formed a committee to develop disclosure guidelines for derivatives and related cash positions.

The group also released a definition of derivatives that distinguishes them from collateralized mortgage obligations and other structured notes.

The group's efforts to develop disclosure guidelines come as the Securities Industry Association has began working with the Securities and Exchange Commission to develop voluntary disclosure guidelines for derivatives market participants.

But Gay Evans, the swaps association's chairman and a managing director of Bankers Trust International in London, said yesterday that the two groups are not working at cross purposes.

The swaps association will probably coordinate its efforts with the SIA, she said. But the swaps group wanted to develop its guidelines because the group represents a broader range of derivatives market participants that includes banks as well as securities firms.

The swaps association believes that the financial statements of dealers and other market participants can be improved to better reflect risks, Evans said.

But a "'derivatives only' approach to disclosure conveys an incomplete and potentially misleading view of a company's credit or market exposure," she said. Disclosure guidelines should cover both derivatives and related cash positions, she said.

Hopefully, the swaps group can issue some disclosure guidelines by the end of the year, Evans said, but the effort will he ongoing, evolving as the markets evolve.

The committee to develop the disclosure guidelines will be beaded by Brian Crows, a senior vice president with Chase Manhattan Bank, and Hannah Sorscher, a vice president for global derivatives at Citibank.

The swaps association said it is defining derivatives because news reports have confused the products with securities that are issued to raise capital, such as collateralized mortgage obligations.

Derivatives are swaps, forwards, caps, floors, and other "bilateral contracts involving the exchange of

cash flows and designed to shift risk between parties," the group said.

When transactions mature, the amounts owed by each party to the other are determined by the prices of underlying commodities, securities, or indexes, the group said.

This is in contrast to mortgage-backed strips and other structured notes, which are securities designed by establishing customtailored formulas for payments of interest or principal.

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