Chair: N.N.
Staff Contact: Peter Werner — pwerner@isda.org

The Central and Eastern Europe/EMEA Committee was established to promote the understanding of the ISDA Master Agreement and to advocate the necessity of netting and collateral arrangements being enforceable in Central, Eastern and Southern Europe as well as other regions in Europe/Middle East/Africa, . ISDA has been working with several local and regional entities to improve the legal and regulatory framework for OTC derivatives.

Starting in 2004, ISDA has been suggesting to the European Commission to consider introducing an EU instrument to harmonize the legal regime for close-out netting and set-off across all EU member states. This far, EU law does not provide a single definition for netting and set-off. The European Commission’s report on the evaluation of the implementation of the Financial Collateral Arrangements Directive (EU Collateral Directive), which was published in December 2006, addresses the need for harmonization. In April 2008, EFMLG and ISDA submitted a proposal to the European Commission for an EU Netting Directive. With regard to jurisdictions globally ISDA has submitted a proposal to UNIDROIT to develop a global convention on netting in financial services.

Since the mid-1990s ISDA has been involved in technical assistance regarding drafting of legislation relevant to derivatives in the Czech Republic, Hungary, Poland and Slovakia. Subsequently, ISDA has published netting and collateral opinions covering several jurisdictions in the CEE and SEE regions. Also, ISDA has been monitoring the implementation of the EU Collateral Directive in several EU member states, including accession countries as well as candidate countries, in particular the Czech Republic (latest ISDA submission dated Apr 26, 2010), Slovakia, Slovenia, Poland, Romania [ISDA letter dated 28 March 2011] and Croatia. In Hungary ISDA in late 2009, worked with local authorities and market participants to reinstate a positive bankruptcy legal regime for netting and collateral agreements entered into with corporate counterparties. The new regime came into force on January 1, 2010. ISDA is working with market participants and regulators across the region with regard to the implementation of several EU directives as well as other types of legislation.

In Russia, ISDA has met and is cooperating with the parliamentary subcommittees in charge of drafting legislation affecting derivatives. The various draft bills are aiming at introducing comprehensive legislation addressing insolvency (close-out netting), banking, contractual an other issues. ISDA has commented on various drafts and has contacted regulators (eg by letter of November 24, 2004 and December 15, 2005), draft bill amending Art 1062 of the Civil Code (letter dated June 8, 2006) and re draft bill amending the Federal Law on Insolvency of Credit Institutions (letter dated September 21, 2007). In September 2008, EBRD and ISDA (in co-operation with three Russian trade associations) organized an event to discuss the latest status and plans to develop the derivatives markets in Russia. In February 2011, netting legislation was adopted for the first time in Russia (entry into force August 2011). In April 2011, ISDA submitted a comment letter to Russian authorities in order to highlight a number of outstanding issues.

ISDA has also started looking into the legal framework for OTC derivatives transactions in Kazakhstan (ISDA letters to the National Bank of Kazakhstan and the Agency for the Regulation and Supervision of the Financial Market and Financial Organizations dated April 15, 2007). In October 2008, ISDA met with Kazakh regulators and the central bank to discuss more details, incl draft legislation. The CEE/EMEA Committee is also discussing latest developments in Ukraine. ISDA has made submissions to various Ukrainian authorities in July 2009.

In Israel, ISDA has commented on several versions of the  Law on financial agreements (ISDA letters sent to the Israeli MoJ dated December 13, 2004), (July 28, 2005) and (February 17, 2006). ISDA has published netting and collateral opinion on Israel.

ISDA is also in contact with regulators and legislators in the GCC region (esp Bahrain, Qatar, Saudi Arabia, UAE) and Pakistan (eg Draft Netting of Financial Contracts Act and Draft Banking Act). The Draft Netting Act reflects ISDA comments. In August 2009, the Pakistani Cabinet of Ministers approved the Netting of Financial Contracts Bill 2009 and submitted it to Parliament for further deliberations.

In Africa, ISDA is looking at several jurisdictions in the Maghreb and beginning to do so in Sub-Saharan Africa.  ISDA has co-drafted the Mauritius Netting of Financial Contracts and Applicable Law of Securities Bill. This bill was incorporated as a special chapter in the new Mauritius Insolvency Act and has entered into force in May 2009.

For the 2006 ISDA  Model Netting Act plus the accompanying memorandum which is designed to answer issues presented by legislators, in particular addressing issues that arise in civil law jurisdictions, please click here.