The 2009 ISDA Credit Derivatives Determinations Committees and Auction Settlement CDS Protocol (or ‘Big Bang’ Protocol) represents the final step in the process known as “hardwiring”, or the incorporation of auction settlement terms into standard CDS documentation.
This is implemented by way of a supplement to the 2003 ISDA Credit Derivatives Definitions. The Auction Supplement amends the ISDA CDS Definitions to incorporate the CDS settlement auction terms that have to date been included in the auction protocols. It also includes provision for the ISDA Determinations Committee, which going forward will make binding determinations for issues such as whether a Credit Event has occurred; whether an auction will be held; and whether a particular obligation is deliverable.
The amendments made by the Auction Supplement apply to transactions entered into going forward. ISDA has also published a Protocol to facilitate the amendment of existing transactions to reflect the new terms.
Full details on the Big Bang Protocol, including FAQs, supplemental materials, and a list of adhering parties, can be found here.
Latest
SwapsInfo Full Year 2024 and Q4 2024
Interest rate derivatives (IRD) trading activity increased in 2024, driven by interest rate volatility, adjustments in central bank policies and shifting market expectations on inflation and economic growth. Index credit derivatives also saw increased activity, as measured by traded notional,...
ISDA Response on UK MIFID Transaction Reporting
On February 14, ISDA submitted a response to the UK Financial Conduct Authority’s (FCA) discussion paper 24/2 on improving the UK transaction reporting regime under the UK Markets in Financial Instruments Directive (MIFID) framework. The FCA indicated it is making...
Saudi Capital Markets Event Welcome Remarks
Capital Markets & the Kingdom of Saudi Arabia February 19, 2025 Opening Remarks Scott O’Malia ISDA Chief Executive Good morning, everyone. I’d like to add my thanks to Saudi Tadawul Group for working with us on this event, as...
Appropriate Capital Regs Needed for Liquid Markets
The Basel III capital framework was designed to strengthen the regulation, supervision and risk management of banks in response to weaknesses exposed by the global financial crisis. As the last components of the framework are finalized and implemented around the...