This page will be updated on a regular basis as relevant information becomes available and will serve as a repository for information from ISDA relating to the initiative to update the 1998 FX and Currency Option Definitions (the “FX Definitions”).
Members who would like to stay updated on or be involved in this initiative can join the ISDA FX Definitions Update Group.
Throughout the project, ISDA will be engaging with market participants and key infrastructure providers. Should any member and non-member have questions or comments, they can email ISDA Market Infrastructure and Technology at MarketInfrastructureandTechnology@isda.org
Background
- ISDA FX Definitions Market Participant Survey
In 2023, ISDA launched a survey to better understand if and how the FX Definitions should be updated. More information is available at the following page. - Strategy for Updating the FX Definitions
In 2023, ISDA developed a strategy for updating the FX Definitions, based on the responses to the survey mentioned above. This strategy is available at the following page.
Project Timeline
See the expected timeline of the topics addressed in the FX Definitions Update Group. Note that this timeline is subject to change.
Work to update the FX Definitions is expected from 2024 until 2027.
Drafting Phase – The drafting phase is expected to run from 2024 until the end of 2025.
Implementation Phase – The industry implementation phase is set to run from late 2025 until November 2027. Upon implementation of the new FX Definitions, it is expected that market participants will reference them in new FX transactions (including rolls of existing transactions). ISDA will publish more detailed implementation timelines and targets as this project progresses so that market participants and infrastructure providers can plan budget and allocate resources as necessary to meet the November 2027 effective date.
Workstreams
During 2024, ISDA will be addressing the following topics.
- Disruption Events and Disruption Fallbacks
Among other things, this work may include amendments to existing Disruption Events/Disruption Fallbacks, addition of Disruption Events/Disruption Fallbacks, development of different consequences for different Disruption Events and consolidation/incorporation of the provisions for CNH (offshore deliverable CNY) and RUB deliverable currency disruption events. - Unexpected Holidays
Consideration of whether FX documentation should address the economic discrepancies that arise when a holiday is scheduled after the trade date for an FX transaction (e.g., a day of mourning) but the forward price does not change to address the addition of an extra non-business day. - Calculation Agent provisions
Incorporating standards from the 2021 ISDA Definitions and from the EMTA Non-Deliverable Templates - Streamline EMTA & EMTA/SFEMC Template Terms
The EMTA Template Terms and EMTA/SFEMC Template Terms will remain separately published documents. However, many (if not all) will be republished with reference to new standard terms that will be reconciled and added to the Main Book (e.g., Unscheduled Holiday, Valuation Postponement for Price Source Disruption, Cumulative Events). - Consolidation of existing components of the FX Definitions
Plan for consolidation of FX documentation components (e.g., FX Supplements, Additional Provisions) into the new FX Definitions.
During 2025, ISDA will be addressing the following topics.
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- Completion of work to consolidate existing components of the FX Definitions
Other than as specifically contemplated, the provisions of the Main Book will remain substantively the same but will be re-drafted to support digitization and digital consumption, as well as to reconcile defined terms and concepts (e.g., Business Day, Business Day Convention, Spot Rate, Settlement Date) for which the same or similar terms are defined differently in the existing FX Definitions and related documentation (including the EMTA Template Terms). - Substantive updates to FX Definitions provisions
- Rounding provisions
- Inclusion of fallbacks from the ISDA Benchmarks Supplement
- Incorporation of the Novation Protocol mechanics
- Production of updated confirmation templates and index of terms
Working Group Calls
Call Title/Topic Call Date Description Recording Link/ Attachments Disruption Events & Disruption Fallbacks October 2, 2024 Overview of the draft provisions for Non-Deliverable Disruption Events Recording Link Attachment 1 Disruption Events & Disruption Fallbacks September 4, 2024 Overview of the impact to FX transactions of Russian sanctions and Malaysian capital controls Recording Link Attachment 1
Attachment 2
Attachment 3Disruption Events & Disruption Fallbacks – APAC Call June 6, 2024 Overview of feedback received on the supplementary questionnaire, focusing on offshore CNY Recording Link Attachment Disruption Events & Disruption Fallbacks – APAC Call May 3, 2024 Overview of feedback received on the questionnaire, focusing on Non-Deliverable transactions and offshore CNY Recording Link Attachment Disruption Events & Disruption Fallbacks May 2, 2024 Overview of feedback received on the questionnaire, focusing on Non-Deliverable transactions Recording Link Attachment Disruption Events & Disruption Fallbacks – APAC Call April 12, 2024 Overview of feedback received on the questionnaire, focusing on Deliverable transactions and offshore CNY Recording Link Attachment Disruption Events & Disruption Fallbacks April 10, 2024 Overview of feedback received on the questionnaire, focusing on Deliverable transactions Recording Link Attachment FX Definitions Update Kick Off Call January 22, 2024 Inaugural call with the WG Attachment - Completion of work to consolidate existing components of the FX Definitions