ISDA is set to reopen its 'small bang' protocol, in response to demand from new entrants. The protocol allows for the incorporation of auction settlement terms following a restructuring credit event into standard CDS documentation.

The adherence period for the protocol will reopen on 5 October and run until 31 January 2011. It was originally open from 14-24 July (SCI passim), with over 2,000 parties adhering.

Robert Pickel, executive director and ceo of ISDA, says: "The successful implementation of our small bang protocol was a major achievement for ISDA and for the industry. I am pleased to see demand from new entrants to sign up to the protocol and benefit from its efficiencies."

A particular feature of the small bang protocol is its forward-looking provisions, which will amend transactions prospectively to incorporate the amendments to industry documentation - such as index documentation - that are affected by the protocol. This feature will allow parties to continue to trade using existing industry standard documentation even while these documents are being updated to incorporate the provisions contained in the protocol. The process of updating these documents will be completed by the end of the new adherence period.