Law360, London: Swiss prosecutors have charged UBS and Credit Suisse over alleged money laundering failures linked to the transfer of almost US$7.9m as part of a corrupt US$2bn scheme to tie Mozambique into loans to finance a tuna fishing fleet.

Also known as a credit squeeze or credit crisis — involves a reduction in the availability of credit and most recently occurred in 2007/2008, peaking with the collapse of Lehmans.

A swap that pays the difference between the market value of a corporate bond (of the sponsoring company perhaps) and the nominal face value of the bond in the event of the default of the bond coupon or capital payment; sometimes relevant in using contingent assets. It is a way of insuring against the failure to pay of a corporate bond.

swap'>Credit default swap—a contract where the protection seller agrees to pay the protection buyer (often the debtor company) a settlement amount on the occurrence of a certain Event of default (eg insolvency) in return for a premium.

Step-by-step guide • Protection buyer (party A) and protection seller (party B) enter into an ISDA Master Agreement, Schedule and confirmation with each other to document a CDS. • The CDS references a reference entity. • In the confirmation, party A and party B agree that the transaction will be auction settled in the event of a credit event on that reference entity. • Party A agrees to pay a fixed

Step-by-step guide • Protection buyer (party A) and protection seller (party B) enter into an ISDA Master Agreement, Schedule and confirmation with each other to document a CDS. • The CDS references a reference entity. • In the confirmation, party A and party B agree that the transaction will be cash settled in the event of a credit event on that reference entity. • Party A agrees to pay a fixed fee or premium to party B—this may be an upfront

Step-by-step guide • Protection buyer (party A) and protection seller (party B) enter into an ISDA Master Agreement, Schedule and confirmation with each other to document a CDS. • The CDS references a reference entity. • In this confirmation, party A and party B agree that the transaction will be physically settled in the event of a credit event on that reference entity. • Party A agrees to pay a fixed fee or premium to party B—this may be an upfront payment or periodic payments throughout the life of the CDS contract. • Party A also agrees to deliver deliverable obligations to party B (see Credit derivatives—credit events—Obligations

What does this Practice Note cover? This Practice Note details the most common type of credit derivative transaction, a credit default swap (CDS). It also explains why parties enter into CDS, how to document a CDS and how CDS are cleared. Furthermore, it sets out some specific CDS structures including CDS referencing asset-backed securities (CDS on ABS), basket CDS (both portfolio CDS and Nth to default CDS), loan only CDS (LCDS) and collateralised debt obligations (CDOs). What is a CDS transaction? The most common type of credit derivative transaction is a credit default swap (CDS). This is a transaction between two parties which is based on the creditworthiness of a third party, known as the reference entity. This reference entity can be a corporate, sovereign, municipality or a similar organisation and does not need to be a party to, or even aware of, the transaction. In fact, it is unlikely the reference entity will be aware of the transaction. The protection buyer is the party that is purchasing the credit protection on the reference

Credit default swap (CDS) is a contract where the protection seller agrees to pay the protection buyer (often the debtor company) a settlement amount on the occurrence of a certain event of default (eg insolvency) in return for a premium.

CASE HUB ARCHIVED–this archived case hub reflects the position at the date of the decision of 20 July 2017; it is no longer maintained. See further, timeline and related cases. Case facts Outline European Commission Article 101 TFEU investigation into a restrictive agreements in the credit default swaps (CDS) market (case number AT.39745). Latest developments On 20 July 2016, the Commission accepted proposed commitments offered by ISDA and Markit after market testing. The commitments are aimed at facilitating access to their respective intellectual property and data for exchange trading purposes, making it easier to trade CDS on exchanges. The commitments offered by ISDA, which would last for ten years, are: • license all rights in the Final Price for the purpose of exchange trading, clearing and/or settling of credit derivatives on FRAND terms • submit to a binding third-party arbitration procedure in the event of any disagreement on the FRAND terms and conditions• prevent investment banks from influencing ISDA's decisions on licensing the Final Price by transferring responsibility for the decision to license from ISDA's Board of Directors

What does this Practice Note cover? This Practice Note outlines the key types of credit events under the 2014 ISDA Credit Derivatives Definitions (the 2014 Definitions). It explains how each event is triggered and operates in practice and highlights their significance for credit derivative transactions. What are credit events? A credit derivative aims to give the purchaser protection against the occurrence of a number of different credit events occurring on the underlying reference entity to that transaction. These credit events are set out in the relevant confirmation to the transaction. As the credit derivatives market is mostly standardised, confirmations will generally apply the same credit events to the same reference entities by incorporating the International Swaps and Derivatives Association (ISDA) Credit Derivatives Physical Settlement Matrix (the Matrix). Reference entities are generally characterised into 'transaction types' depending on where the reference entity is located. For example: • Sony Corporation would be classified as a Standard Japan Corporate transaction type, and • the Kingdom of Spain would be a Western European Sovereign transaction type All reference

What does this Practice Note cover? This Practice Note explains how the three settlement methods—auction settlement, cash settlement and physical settlement—operate in a credit derivative transaction. It also describes a fallback settlement method and why and when this method might be used in practice. What are the settlement methods in credit derivative transactions? Once a credit derivative transaction has been triggered, the parties to that transaction will want to settle it so that they each receive any amounts that are owing to it. Parties may elect which settlement method will apply for that transaction: • auction settlement • cash settlement, or • physical settlement The 2014 ISDA Credit Derivative Definitions (the 2014 Definitions) provide for settlement after the conditions to settlement have been satisfied. For more information, see Practice Note: Triggering and settling credit derivatives. Auction settlement is the preferred settlement method. It facilitates greater standardisation in the credit default swap market ensuring contracts on the same reference entity are fungible and able to be cleared centrally. Auction settlement Auction settlement is described