By Christopher Whittall

LONDON, Sept 17 (IFR) - The roll-out of new documentation for benchmark credit default swap indices has been delayed by two weeks, index provider Markit said today, as the industry struggles to prepare for the largest overhaul of the US$21trn market in over five years.

The first day of trading on the new series of Markit's CDX and iTraxx CDS indices will now be October 6, Markit stated. This follows an announcement from ISDA last week that the effective date for changes to existing CDS trades under the new 2014 ISDA Credit Definitions protocol would be delayed until the same date.

The new definitions were originally scheduled to launch on September 22 at the same time as one of the bi-annual rolls of Markit's credit indices. The delays come on the back of a last minute scramble from participants to sign up to the new protocol last week, which caused ISDA to extend the deadline for enrolment until today and postpone the launch by two weeks.

More broadly, there has been much industry debate over how the new contracts - which look to fix flaws in the old documentation around sovereign and bank restructurings - should be priced when they are eventually launched. In particular, some dealers are understood to be taking hugely diverging views on the value of the new contracts linked to bank sub debt, which have undergone major changes.

The expansion of the iTraxx Crossover index - the bellwether for European high-yield CDS - by 15 names to 75 is also expected to create uncertainty at the index roll. Traders expect volatile price action during the first session of the new launch as a result.

Markit stated the effective date for the indices will still remain as September 20 so the first coupon is unaffected, but the first day of trading on the new series will now be October 6.

One industry source said the infrastructure will be in place for people to begin trading the new definitions for single-name CDS from September 22 onwards should they desire, but it seems more likely that participants will wait until the new protocol comes online.

The CDS industry has form when it comes to delaying the roll-out of major changes. One credit veteran noted that the so-called Big Bang back in 2009 - which standardised contract terms - was delayed by around a month due to the industry being unprepared for the transition.

(Reporting by Christopher Whittall, editing by Helen Bartholomew)