The International Swaps and Derivatives Association, Inc. (ISDA)
and IHS Markit today announced the launch of the ISDA 2016
Variation Margin Protocol on ISDA Amend, which automates the
process for amending existing collateral documents or setting up
new agreements in order to comply with new variation margin
requirements going into effect on March 1, 2017.
The ISDA Amend platform enables counterparties to electronically
share specially designed questionnaires through a centralized
online platform, removing the need for bilateral negotiations.
Counterparties can make elections under the Protocol, including
which regulatory regimes apply and which method they will use to
make the required changes to their documentation. ISDA Amend also
automates the reconciliation of those questionnaires between
counterparties.
The Protocol currently covers margin rules for non-cleared
derivatives issued by the US, the European Union, Japan and Canada.
ISDA Amend is a free service for buy-side firms and corporates.
Over 8,000 buy-side firms and corporates, representing over 65,000
legal entities, are currently subscribed to the service.
“Starting on March 1, the new variation margin rules will apply
to a wide universe of financial institutions from various
jurisdictions, and these firms will be required to make important
changes to their derivatives documentation,” said Katherine Darras,
ISDA’s General Counsel. “The launch of the ISDA 2016 Variation
Margin Protocol on ISDA Amend will enable counterparties to make
those changes quickly and efficiently.”
“The Variation Margin Protocol available on ISDA Amend addresses
the multijurisdictional compliance challenges of the non-cleared
margin rules,” said Darren Thomas, managing director and head of
Counterparty Manager at IHS Markit. “We have closely partnered with
ISDA and its working groups to develop a rules-based, electronic
solution that supports the major margin regulatory regimes and
helps the broader industry meet margin requirements within a
compressed time frame.”
The Protocol gives participants three alternative methods for
amending existing collateral documentation or setting up new
agreements:
- Amend: Firms apply the necessary
changes to existing credit support annexes (CSAs);
- Replicate and Amend: Users
replicate existing CSAs and make the necessary changes to
agreements for new trades only; or
- New CSA: Market participants can
put in place a new CSA with limited standardized terms and, if
needed, a new ISDA Master Agreement.
Parties using the Protocol will need to decide which method is
best suited for them and their counterparties, and match their
elections in the questionnaires.
The Protocol was published on August 16, and was supplemented
with terms to meet European Union rules on November 17. The text of
the Protocol, guidance on the mechanics and a link for adherence,
along with answers to frequently asked questions and a list of
adherents, are available on the Protocol Management section of
ISDA’s website.
ISDA and IHS Markit will host an informational webinar that will
outline the new ISDA Amend functionality for the Protocol on
Thursday, December 1 at 10am EST. Registration is now open.
The Variation Margin Protocol on ISDA Amend is one of a series
of measures to facilitate compliance with the rules on margin for
non-cleared derivatives. A list of steps prepared by ISDA on how to
get ready for the March 1 variation margin deadline is available
here. More information on ISDA’s margin for non-cleared derivatives
initiative is available on the ISDA webpage.
About ISDA Amend
ISDA Amend is an online service launched by ISDA and IHS Markit
in August 2012, and is intended to help facilitate compliance with
new requirements related to the Dodd-Frank Act and the European
Market Infrastructure Regulation (EMIR). Using ISDA Amend, swap
dealers and their customers can classify their trading entities, as
well as amend and share multiple ISDA Master Agreements using a
single online tool.
ISDA Amend 2.0, which was launched in August 2016, further
expands the functionality of the service to include tools to aid
compliance with the margin rules for non-cleared derivatives and
resolution requirements. This includes the ISDA Self-Disclosure
Letter, the ISDA Variation Margin Protocol and the ISDA
Jurisdictional Modular Protocol. ISDA Amend is a free service for
buy-side firms and corporates. Additional information on ISDA
Amend, including presentations, documentation and audio playback,
is available on the ISDA Amend website.
About ISDA
Since 1985, ISDA has worked to make the global derivatives
markets safer and more efficient. Today, ISDA has over 850 member
institutions from 67 countries. These members comprise a broad
range of derivatives market participants, including corporations,
investment managers, government and supranational entities,
insurance companies, energy and commodities firms, and
international and regional banks. In addition to market
participants, members also include key components of the
derivatives market infrastructure, such as exchanges,
intermediaries, clearing houses and repositories, as well as law
firms, accounting firms and other service providers. Information
about ISDA and its activities is available on the Association's
website: www.isda.org.
ISDA® is a registered trademark of the International Swaps and
Derivatives Association, Inc.
About IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq:INFO) is a world leader in critical
information, analytics and solutions for the major industries and
markets that drive economies worldwide. The company delivers
next-generation information, analytics and solutions to customers
in business, finance and government, improving their operational
efficiency and providing deep insights that lead to well-informed,
confident decisions. IHS Markit has more than 50,000 key business
and government customers, including 80 percent of the Fortune
Global 500 and the world’s leading financial institutions.
Headquartered in London, IHS Markit is committed to sustainable,
profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd. All
other company and product names may be trademarks of their
respective owners © 2016 IHS Markit Ltd. All rights reserved.
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For Media Enquiries:ISDA LondonNick Sawyer,
+44-203-808-9740nsawyer@isda.orgorISDA New YorkLauren Dobbs,
+1-212-901-6019ldobbs@isda.orgorISDA LondonMichael Milner-Watt,
+44-203-808 -9727mmilner-watt@isda.orgorISDA Hong KongAmanda Leung,
+852-2200-5911aleung@isda.orgorIHS Markit, New YorkNicole
Angerone-McLeod, +1-646-679-3195nicole.mcleod@ihs.markit.comorIHS
Markit, SingaporeJerrine Chia,
+65-6922-4239jerrine.chia@ihsmarkit.com
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