ISDA Announces Results of Consultation to Implement Swap Fallbacks
The International Swaps and Derivatives Association (ISDA) published an updated and enhanced version of its definitional booklet for interest rate derivatives, marking a big step in the shift to digital documentation. Along with this, ISDA launched a new digital documentation platform to improve the ability of firms to efficiently access and navigate ISDA documents. The platform called MyLibrary will initially include the new 2021 ISDA Interest Rate Derivatives Definitions and the 2002 ISDA Master Agreement. Other documentation will be available in digital form via the platform over time. In a separate development, ISDA announced the results of its consultation on the implementation of fallbacks for the sterling LIBOR ICE Swap Rate and the USD LIBOR ICE Swap Rate. The results indicate that a significant majority of respondents agree with the fallback provisions set out in the draft amendments attached to the consultation.
The amendments in the consultation implement the fallbacks suggested by the Non-Linear Task Force of the Working Group on Sterling Risk-Free Reference Rates in the UK and a Subcommittee of the Alternative Reference Rates Committee in the US. Respondents to the consultation satisfied the criteria specified in the consultation for ISDA to publish a Supplement to the 2006 ISDA Definitions to incorporate the sterling LIBOR ICE Swap Rate fallback provisions and a Supplement to incorporate the US dollar LIBOR ICE Swap Rate fallback provisions as well as template language that counterparties could use to negotiate bilateral amendments for incorporation of the amended terms in legacy derivative contracts. A report analyzing the consultation results will be available in the coming weeks. ISDA will also begin finalizing the amendments to implement fallbacks for the sterling LIBOR ICE Swap Rate as soon as possible and will finalize the amendments to implement fallbacks for the USD LIBOR ICE Swap Rate when a SOFR swap rate is published in a form that can be referenced in financial instruments. On July 19, 2021, ISDA had launched its Understanding IBOR Benchmark Fallbacks microsite on its newly redesigned Benchmark Reform and Transition from LIBOR InfoHub. The microsite was developed in coordination with The Brattle Group and provides background information about key interbank offered rate fallbacks.
Related Links
- Digital Definitions for Interest Rate Derivatives
- MyLibrary Platform
- Consultation on Fallbacks
- Understanding IBOR Benchmark Fallbacks: Microsite
- Benchmark Reform and Transition from LIBOR: InfoHub
Keywords: International, Banking, Securities, Insurance, Benchmark Reforms, LIBOR Transition, ICE Swap Rate, Benchmark Fallbacks, LIBOR, Derivatives, Interest Rate Derivatives, ISDA Definitions, ISDA
Previous Article
EIOPA Consults on Reporting and Disclosures Under Solvency IIRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
