In June 2024, ISDA published the Close-out Framework, which is available here:
Prepared in response to the March 2023 failure of Signature Bank and SVB in the US, and the subsequent acquisition of Credit Suisse by UBS, the ISDA Close-out Framework is a reference tool that market participants can use to prepare for the potential close out of collateralized derivatives.
The termination of over-the-counter derivatives trading relationships is more complex following various post-crisis regulatory reforms. Specifically, in-scope entities are now required to post margin for non-cleared derivatives transactions, some of which is segregated with a third-party custodian, while various jurisdictions have introduced mandatory stays on termination rights and remedies as part of bank resolution regimes. The Close-out Framework is an interactive decision tree providing high-level analysis of the 2002 ISDA Master Agreement (events of default and related notices), the possible application of statutory and contractual stays, and rights to return of and/or enforcement over posted collateral under variation margin and initial margin credit support annexes and related custodial documentation.
This high-level fact sheet contains further information:
What is the ISDA Close-out Framework?
A recording of a working group call which features a summary and demonstration of the Close-out Framework is available here: