ISDA has extended the closing date for the CDS NTCE Protocol by two weeks. The Protocol will now close on Oct. 28.

This extension of the adherence period is due to the relatively modest rate of adherence so far. This is not atypical in the context of changes that are not driven by regulations, and it may reflect the need by CDS market participants to fully understand the significance of the proposed changes to the CDS contract. On the buy side in particular, market participants may need some more time to analyze the impact the proposed changes will have on their CDS books. As we highlighted in a previous alert, there are a number of issues market participants should consider in that respect, which include value transfer as well as the liquidity, operational, regulatory and reputational consequences of nonadherence.