What is an ISDA protocol?

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Published on LexisPSL on 01/04/2021

The following Banking & Finance Q&A provides comprehensive and up to date legal information covering:

  • What is an ISDA protocol?
  • What is an ISDA protocol?
  • Are protocols a new tool used by ISDA?
  • Why would I adhere to a protocol?
  • How do I adhere to a protocol?
  • Recent list of ISDA protocols

What is an ISDA protocol?

What is an ISDA protocol?

The International Swaps and Derivatives Association Inc. (ISDA) publish protocols from time to time. Protocols are a means of amending ISDA's standard form documents in a quick and practical way. The amendments suggested by ISDA in the protocols can be incorporated into parties' existing documents by those parties agreeing, or 'adhering', to that protocol. By adhering to a protocol, it means that a party can amend a large number of documents with a large number of counterparties in one go.

For each protocol, ISDA will publish text to document the changes that have been agreed with the relevant ISDA working group and also an adherence letter. Both ISDA members and non-ISDA members can then send executed copies of the adherence letter to ISDA who collate a list of the parties who have agreed to be bound by the protocol. This means that if both you and your counterparty agree to be bound by the protocol, all the documents affected by the changes set out in the protocol will be amended automatically on the terms of the protocol.

On the ISDA protocol management page, ISDA will publish:

  1. full text of the protocol

  2. list of adhering parties, and

  3. frequently asked questions

Once the protocol has been signed, no further amendment or negotiation needs to be done by the adhering

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