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Dealers battle buy-side inertia and eleventh-hour confusion as belated security-based swap rules bite

To print this article, all you need is to be registered or login on Mondaq.com. This practice note focuses on credit default swaps (CDS) (both single-name and index) and provides a high-level overview of their functioning, with a particular emphasis on corporate CDS. Although the product may appear relatively simple at first sight, it is governed by a complex set of rules. Investors should seek to fully understand their terms before they trade the product in an effort to avoid falling into a trap for the unwary. Credit derivatives are financial contracts enabling marke...