Delegates and speakers were buzzing about the International Swaps and Derivatives Association's credit-default swap settlement protocol, finalized last week. Dubbed the CDS Protocol, it will apply not only to index trades, as with previous protocols, but also to bespoke tranches, single-name CDS and other vanilla products. It will provide for physical settlement of market orders and also accommodate cash settlement, promoting transparency by publishing information about participants, prices, auction results, open interest and penalty bids.
Louise Marshall, ISDA spokeswoman, said provisions for a dispute resolution panel may be added at a later stage. Eventually, based on market feedback, the protocol may be published as an annex to ISDA's 2003 credit derivatives definitions, as a supplement to the 2003 definitions or as revised definitions.
