The International Swaps and Derivatives Association, Inc. (ISDA) announced today that the 2014 ISDA Credit Derivatives Definitions will go live from September 2014. The revised version of the 2003 ISDA Credit Derivatives Definitions will contain the basic terms used in the documentation of most credit derivatives transactions.
Over the past three months, the ISDA Credit Steering Committee (CSC) has worked with infrastructure providers and clearing houses to develop an appropriate implementation schedule for the new Definitions, including an assessment of the various changes to existing infrastructure that are necessary to support the change.
This working group has determined the appropriate implementation date for the new Definitions would be the September 2014 CDS roll date.
An earlier launch or phased-in approach had been discussed, but it was agreed that a longer time frame would enable market participants and infrastructure providers to make the necessary operational and infrastructure changes and to allow a smooth adoption of the new Definitions with minimal impact on markets.
The 2014 ISDA Credit Derivatives Definitions will introduce several new terms, including a new credit event that would be triggered by a government bail-in of a financial reference entity. A working group under the CSC began work on the revisions in May 2012, and the final Definitions will be published soon.
