The International Swaps and Derivatives Association, Inc. (ISDA) and IHS Markit today announced the launch of ISDA Amend 2.0.
ISDA Amend 2.0 includes functionality to allow market participants to implement the new margining requirements for non-cleared derivatives, as well as the ability to inform counterparties about elections they have made under the ISDA Resolution Stay Jurisdictional Modular Protocol (ISDA JMP).
ISDA Amend initially launched in August 2012 as an online service developed by ISDA and IHS Markit, and allows users of Counterparty Manager to amend multiple ISDA Master Agreements and share regulatory representations. ISDA Amend is a free service for buy-side firms and corporates. More than 7,500 buy-side firms and corporates, representing over 60,000 legal entities, are currently subscribed to the service.
“ISDA and IHS Markit have collaborated on ISDA Amend for over five years, and it has proved hugely successful in helping market participants gather and share data required by the Dodd-Frank Act and European Market Infrastructure Regulation (EMIR),” said Katherine Darras, ISDA’s General Counsel. “ISDA Amend 2.0 broadens that offering, and will help firms implement the non-cleared derivatives margin rules, as well as help market participants provide information to their counterparties and make elections related to their adherence to jurisdictional modules under the ISDA Resolution Stay Jurisdictional Modular Protocol.”
“The sheer volume of documents, coupled with the disparate deadlines for posting initial and variation margin on uncleared derivatives, presents a huge challenge for global financial institutions,” said Darren Thomas, managing director and head of Counterparty Manager at IHS Markit. “ISDA Amend 2.0 has been designed to manage the complexity of these multijurisdictional regulations. The service will leverage data provided through previous ISDA Amend protocols with full connectivity to IHS Markit’s end-to-end collateral repapering solution to digitize, negotiate and amend collateral agreements on Counterparty Manager.”
ISDA and IHS Markit will host an informational webinar that will outline the new functionality of ISDA Amend 2.0 on Thursday, Aug. 11, at 10 a.m. EDT. Registration is now open.
Jurisdictions around the world are implementing regulatory margin requirements for non-cleared derivatives transactions based on the framework published by the Basel Committee on Banking Supervision and the International Organization of Securities Commissions. The ISDA Regulatory Margin Self-Disclosure Letter on ISDA Amend is intended to assist market participants with the exchange of the necessary information to determine if, and when, their trading relationship will become subject to regulatory margin requirements for non-cleared derivatives in Canada, the European Union, Japan, Switzerland and the United States. The letter will be expanded to cover additional jurisdictions that may be subject to the margin requirements in due course.
In addition, the ISDA 2016 Variation Margin Protocol, which will be available on ISDA Amend in October 2016, is designed to help market participants comply with new rules on margin for non-cleared swaps, by providing a scalable solution to amend derivatives contract documentation with multiple counterparties. The Protocol addresses documentation changes necessary to comply with the variation margin requirements that will apply to a large number of market participants in various jurisdictions from March 2017. For more information, please see the ISDA WGMR Implementation Initiative webpage.
The ISDA JMP on ISDA Amend allows market participants to quickly and efficiently inform their counterparties about the elections they have made when adhering to the jurisdictional modules of the Protocol. This includes the capacity in which they have adhered (ie, as an entity subject to applicable regulations, as a counterparty to these entities, or both), the counterparties they have amended financial agreements with, and the underlying funds they have adhered on behalf of. The JMP enables market participants to comply with new regulations aimed at ensuring the cross-border enforceability of stays on contractual termination rights.
The ISDA JMP will have separate jurisdictional modules, each designed to closely reflect the requirements in a particular jurisdiction. Each jurisdictional module will contain the operative provisions necessary for adhering parties to comply with applicable requirements. The ISDA JMP on ISDA Amend initially covers the UK (PRA Rule) Jurisdictional Module to the ISDA JMP, which enables firms to comply with UK Prudential Regulation Authority requirements. Functionality for other jurisdictional modules will be launched in due course.
The new elements come on top of existing ISDA Amend functionality, which supports compliance with various Dodd-Frank and EMIR rule-makings, including:
· The ISDA August 2012 and March 2013 Dodd-Frank Protocols;
· The ISDA Cross-Border Representation Letter;
· The EMIR Counterparty Classification Tool; and
· The EMIR Clearing Classification Tool, which was recently expanded to cover the clearing obligation for certain interest rate derivatives classes denominated in European Economic Area (EEA) currencies and certain credit default swaps (CDS) index classes.
Other ISDA regulatory tools currently available on ISDA Amend include the Canadian Representation Letter, the Australian Single-Sided Reporting Letter and the Australian Mandatory Clearing Classification Letter.
Additional information on ISDA Amend, including presentations, documentation and audio playback, is available on the ISDA Amend website.
The ISDA Jurisdictional Modular Protocol and the ISDA 2016 Variation Margin Protocol are open to members and non-members. The text of the Protocols and a link to adhere to the Protocols as well as guidance on the mechanics of the Protocols, answers to frequently asked questions and details on adherents, are available on the Protocol Management section of ISDA’s website.