On August 7, ISDA submitted a response to HM Treasury’s (HMT) consultation on removing the restrictions on uncovered sovereign credit default swaps (CDS).

This work is part of HMT’s program to deliver a smarter regulatory framework, tailored to the UK and designed to remove the requirements currently placed on investors when taking out short positions in sovereign debt or sovereign CDS, and the related reporting requirements.

The response focuses on the CDS market and supports the proposal to remove the restrictions, highlighting some of the benefits that may result.