ISDA 2014 Credit Derivatives Definitions

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.

i The Protocol will enable market participants to apply the 2014 Definitions to certain existing transactions, thereby eliminating distinctions between those transactions and new transactions entered into on the 2014 Definitions. Market participants, by adhering to the Protocol, agree to amend existing credit derivative transactions within the scope of the Protocol with all other adhering parties to incorporate the 2014 Definitions into the documentation for their transactions in place of the 2003 Definitions.

HSBC has based this document on information obtained from sources it believes to be reliable but which have not been independently verified. Except in the case of fraudulent misrepresentation, no liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this information or document. HSBC is under no obligation to keep current the information in this update. You are solely responsible for making your own independent appraisal of information referred to above and you should not rely on any of this information as constituting advice. Neither HSBC nor any of its affiliates are responsible for providing you with legal, tax or other specialist advice and you should make your own arrangements in respect of this accordingly.

Last updated: 2 August 2016