IOSCO Statement on the ISDA Credit Derivatives Determinations Committees and CDS auction processes

10 October 2017 The International Organization of Securities Commissions (IOSCO) is today issuing this statement about the research of the IOSCO Task Force on OTC Derivatives Regulation (Task Force) regarding the functioning of the ISDA Credit Derivatives Determinations Committee (DC) and credit default swap (CDS) auction processes. IOSCO may perform further work in this area. Background of the research: The Task Force’s research was based on a review of publicly available documents (such as the DC rules and auction terms published by ISDA, as well as published auction decisions) and select academic literature. The Task Force also considered confidential survey inputs from buy-side and sell-side market participants in various regions, as well as from ISDA and the Auction Administrators (IHS Markit and Creditex). This research allowed the Task Force to gain an understanding of the functioning and some of the potential limitations of the DC and CDS auction processes. The survey responses represent a range of market participants’ perspectives on the functioning of the DC and CDS auction processes and their views on potential avenues for improvement.