About the 2014 ISDA Credit Derivatives Definitions
The 2014 ISDA Credit Derivatives Definitions are an updated and revised version of the 2003 ISDA Credit Derivatives Definitions, a document that contains the basic terms used in the documentation of most credit derivatives transactions. ISDA published the 2014 ISDA Credit Derivatives Definitions in February 2014 and trading using the new Definitions is scheduled to begin on 22 September 2014.
These new definitions incorporate the 2009 ISDA Credit Derivatives Determinations Committees, Auction Settlement and Restructuring Supplement to the 2003 ISDA Credit Derivatives Definitions, published on 14 July, 2009 and are a response to market developments since the financial crisis.
What happens next?
ISDA has published a Protocol in order to migrate trades from the 2003 to the 2014 Definitions. The protocol excludes certain Financials and Sovereigns as the changes to the definitions have a price impact on trades on these reference entities. The excluded entities can be found on an excluded entity list published on the ISDA website.
HSBC entities have adhered, or will shortly adhere, to the Protocol. In order to ensure no interruption to our trading relationship, HSBC urges our clients to adhere to the Protocol as soon as possible.
Adherence instructions can be found on the ISDA website
On 22 September 2014, the following changes took effect:
- Trading commenced on the 2014 Definitions for corporate, sovereign and financial entities, and new series of indices containing those entities.
- Trading commenced on the new transaction types for financial entities, where applicable.
- The Protocol was applied.
- Entities began trading on Standard Reference Obligations (where a Standard Reference Obligation was published).
For further information on the new 2014 ISDA Credit Derivatives Definitions, please visit the ISDA website or consult the FAQs.