On August 11, 2014, ISDA® released a draft protocol (2014 CDDs Protocol) for the 2014 ISDA Credit Derivatives Definitions (2014 CDDs), as well as other related documents. The 2014 CDDs are an updated and revised version of the 2003 ISDA Credit Derivatives Definitions (2003 CDDs), which include basic terms used in the documentation of most credit derivatives transactions including credit default swaps (CDS) (see Practice Note, Introduction to the 2014 ISDA Credit Derivatives Definitions).

The 2014 CDDs, originally published in February 2014, are scheduled to go live on September 22, 2014 and may be incorporated by reference into documentation for credit derivatives transactions to govern those transactions through adherence to the 2014 CDDs Protocol. The protocol enables parties to amend the terms of their existing transactions so that they incorporate the provisions of the 2014 Definitions. Adherence is optional, and parties may continue to have their credit derivatives transactions governed under the 2003 CDDs.

The 2014 CDDs Protocol includes an adherence letter, which parties who wish to adhere to the 2014 CDDs Protocol may execute and deliver to ISDA. When two parties adhere to the protocol for specific transactions, those transactions are then governed by the 2014 CDDs. The 2014 CDDs Protocol will be open for adherence starting August 18, 2014, and the initial protocol adherence period ends on September 12, 2014. Note that the drafts of the 2014 CDDs Protocol and related documents are not yet finalized and may be subject to change.

To assist members, in June 2014, ISDA also published FAQs on the 2014 CDDs, which help to explain common questions members may have about the operational processing for certain credit derivative transactions when the 2014 CDDs go live and an industry plan with an implementation timeline and key activities and dates for the 2014 CDDs.

Update: On August 21, 2014, ISDA published the final version of the 2014 CDDs Protocol (see Legal Update: ISDA Publishes Protocol for 2014 Credit Derivatives Definitions).