A plan is in the works to offer an off-the-shelf protocol for settling single-name credit-default swaps and index trades by the end of the year. The project will likely provide an option for physical or cash settlement and will be tested over the next several defaults. "A generic protocol is a short-term solution designed to be used on all CDS globally," said Kimberly Summe, ISDA general counsel. The ISDA effort to standardize settlement mechanics grew out of lessons from individual protocols for each of the past year's six defaults.
Separately, Summe said, the Depository Trust and Clearing Corp. is planning to roll out a platform for confirming and settling all credit derivative contracts, also by the end of the year.
