CDSs referenced to ABS have largely been following standard documentation for CDSs referenced to corporate obligors and then modified to match the deal parameters. But some parties find this approach to be time-intensive and inconsistent. This has led to demand for standardisation.
"If you have something that's standardised, it helps provide more comfort to the market," said Bradley. "The second template is also undergoing revisions to accommodate changes in the market since the templates were originally released."
The outline of the new documentation could be released by Isda by February next year.