ISDA®
INTERNATIONAL SWAPS AND DERIVATIVES
ASSOCIATION, INC.
For Immediate Release, Tuesday, July
14, 2009
For More Information, Please
Contact:
Deirdre Leahy, ISDA New York, +1
212-901-6021, dleahy@isda.org
Cesaltine Gregorio, ISDA New York,
+1 212-901-6019, cgregorio@isda.org
Donna Chan, ISDA Hong Kong, +852 2200 5906, dchan@isda.org
ISDA
Launches 'Small Bang Protocol'
and Restructuring Supplement
The adherence period for the
Protocol will run until Friday, July 24. The market practice changes set out by
the Protocol will take effect on Monday, July 27.
“The 'Small Bang Protocol' is an
additional step towards achieving increased standardization, transparency and
liquidity in the industry and facilitating central clearing of CDS,” said
Robert Pickel, Executive Director and Chief Executive Officer, ISDA. “The
ability to hold an auction for any credit event that may occur is a critically
important piece of the continuing enhancement of the CDS business.
'Small Bang' for the
existing trade population, together with the Restructuring supplement for
trades going forward, is the latest in the ongoing series of documentation and
market practice changes to the trading convention for CDS. Other market
practice changes, which took effect on June 22, include
the adoption of fixed coupons, payable up-front for European trades, and a move
from monthly to quarterly 'roll' dates in emerging market CDS transactions.
In a June 2 letter to
the Federal Reserve Bank of
As part of its educational
initiatives relating to these changes, ISDA is hosting press briefings in
London and New York on Wednesday, July 15 and Thursday, July 16
respectively. The briefings will offer reporters
an opportunity to discuss with the architects of these key amendments the role
that the changes will play in the future direction of the CDS industry. The
briefings will be followed in each case by a symposium: Credit Derivative
Market Practice Changes.
This educational effort is
supplemented by a webcast outlining key points of the 'Small Bang Protocol' and
Restructuring Supplement. The webcast, which includes a brief slide
presentation, discusses the implementation of auction settlement following a
Restructuring Credit Event, and is available at http://secure.webex.com/g2.asp?id=JE5BAOZS.
The text of the Protocol and form of
adherence letter, guidance on the mechanics of the Protocol, and answers to
frequently asked questions are available at www.isda.org.
About ISDA
ISDA, which represents participants in the privately negotiated derivatives
industry, is among the world’s largest global financial trade associations as
measured by number of member firms. ISDA was chartered in 1985, and today has
over 830 member institutions from 58 countries on six continents. These members
include most of the world’s major institutions that deal in privately
negotiated derivatives, as well as many of the businesses, governmental
entities and other end users that rely on over-the-counter derivatives to
manage efficiently the financial market risks inherent in their core economic
activities. Information about ISDA and its activities is available on the
Association's web site: www.isda.org.
®ISDA is a registered trademark of
the International Swaps and Derivatives Association, Inc.