Following member feedback, ISDA’s Credit Steering Committee (CSC) recommended that ISDA extend the Protocol adherence period in order to provide additional time for market participants to adhere and to evaluate the addition of Caesars, which is a complex and evolving credit situation, to the Protocol’s excluded reference entity list. Credit default swap (CDS) contracts referring to reference entities on that list are excluded from the scope of the Protocol, and so remain on their existing terms. Nearly 200 reference entities were on the excluded list when the list was first published on August 21, 2014.
The adherence extension does not affect the intended September 22, 2014 launch date on which trading using the new 2014 ISDA Credit Derivatives Definitions is expected to begin. However, to allow time for operational processing and to avoid the quarter end, the CSC also recommended that the effective date for changes to existing trades under the Protocol be delayed until October 6, 2014.
The Protocol is designed to enable market participants to apply the 2014 Definitions to certain existing credit derivative transactions, thereby eliminating distinctions between those transactions and new transactions entered into on the 2014 Definitions. By adhering to the Protocol, market participants agree to amend transactions within the scope of the Protocol with all other adhering parties to incorporate the 2014 Definitions into the documentation for those transactions in place of the 2003 Definitions.
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