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  2. ISDA 2023 Equity Swap – 2021 Definitions Protocol

ISDA 2023 Equity Swap – 2021 Definitions Protocol

Open from October 30, 2023

The ISDA 2023 Equity Swap – 2021 Definitions Protocol was created to allow parties to certain Protocol Covered Documents to amend the terms of each such agreement so as to, among others:

  • incorporate the 2021 ISDA Interest Rate Derivatives Definitions in place of the 2006 ISDA Definitions; and
  • make related amendments to the floating leg provisions in transactions documented under each such Protocol Covered Document.

Please refer to the “Frequently Asked Questions” for more information.

The Protocol is open to ISDA members and non-members. Parties will pay a one-time fee of $500 to ISDA to adhere to the Protocol. There is no cut-off date to the Protocol. ISDA does, however, reserve the right to designate a cut-off date by giving 30 days’ notice on this site.

ISDA has prepared this list of frequently asked questions to assist in your consideration of the ISDA 2023 EQUITY SWAP – 2021 DEFINITIONS PROTOCOL (the “Protocol”).

THESE FREQUENTLY ASKED QUESTIONS DO NOT PURPORT TO BE AND SHOULD NOT BE CONSIDERED A GUIDE TO OR AN EXPLANATION OF ALL RELEVANT ISSUES OR CONSIDERATIONS IN CONNECTION WITH THE ISDA 2023 EQUITY SWAP – 2021 DEFINITIONS PROTOCOL. PARTIES SHOULD CONSULT WITH THEIR LEGAL ADVISERS AND ANY OTHER ADVISER THEY DEEM APPROPRIATE PRIOR TO USING OR ADHERING TO THE ISDA 2023 EQUITY SWAP – 2021 DEFINITIONS PROTOCOL. ISDA ASSUMES NO RESPONSIBILITY FOR ANY USE TO WHICH ANY OF ITS DOCUMENTATION MAY BE PUT.

The FAQs sets out questions under the following general headings:

  1. Purpose and Scope
    1. What is the purpose of the Protocol?
    2. What agreements does the Protocol cover?
    3. What agreements and transactions does the Protocol amend?
    4. What amendments will be made to Protocol Covered Documents?
    5. What version of the 2021 Definitions will be incorporated?
    6. Will legacy Equity Swap Transactions be amended?
    7. Will hard-wired elections, bespoke provisions and bespoke amendments be preserved?
    8. Which calculations will be affected by the incorporation of Section 1.2 (Determinations by the Calculation Agent) of the 2021 Definitions into a Protocol Covered Document?
    9. What is the interaction between the 2021 Definitions and the 2002 Equity Definitions pursuant to a Protocol Covered Document?
    10. Is it possible to exclude application of the Protocol in respect of an Equity Master Confirmation Agreement?
  2. Timing and effect of the Protocol
    1. When does the Protocol become effective?
      1. When is the Protocol Effective Date?
      2. When is the agreement to make the amendments contemplated by the Protocol made?
      3. When are the amendments contemplated by the Protocol actually made?
    2. Will the Protocol apply to novated transactions?
  3. Adherence - General
    1. How do I submit an adherence letter?
    2. What kind of entities can adhere to the Protocol?
    3. Can entities that are not ISDA members adhere to the Protocol?
    4. Can natural persons adhere to the Protocol?
  4. Adherence - Agents
    1. Can an investment manager/asset manager or other Agent adhere to the Protocol on behalf of its Clients?
    2. How will an investment manager/asset manager or other Agent adhere to the Protocol on behalf of its Clients?
      1. Can an Agent adhere on behalf of all of its Clients?
      2. Can an Agent adhere on behalf of some, but not all, of its clients?
    3. Can I adhere to the Protocol as an Agent if I do not want to use a Platform or the Agency Adherence Module?
    4. How does an Agent adhere as a principal and on behalf of its clients?
    5. Will a Protocol Covered Document into which an Agent did not enter on behalf of its Clients but that the Agent otherwise has the authority to amend be amended under the Protocol by virtue of the Agent adhering on behalf of its Clients?
      1. Agent Executed Protocol Covered Documents and Non-Agent Executed Protocol Covered Documents
      2. Requirement to identify Clients and provide evidence of authority:
      3. Adding Clients to the list of Clients on whose behalf the Agent is amending Non-Agent Executed Protocol Covered Documents:
      4. Implementation Date for Non-Agent Executed Protocol Covered Documents:
    6. What happens if an Agent enters into an umbrella agreement that is a Protocol Covered Document with a counterparty after both the Agent and the counterparty have adhered to the Protocol but before the Protocol Effective Date?
    7. What happens if an Agent adds a Client to an umbrella agreement that is an Agent Protocol Covered Document after adhering to the Protocol?
    8. If a Client adheres to the Protocol itself and an Agent which represents that Client also adheres to the Protocol on behalf of that Client, what will the Implementation Date be for any Protocol Covered Document?
    9. If an Agent that has entered into a Protocol Covered Document on behalf of a Client adheres to the Protocol on behalf of that Client and another Agent who did not enter into that Protocol Covered Document but which otherwise has the authority to amend that Protocol Covered Document also adheres to the Protocol and identifies that Client as a Client in respect of which ‘Non-Agent Executed Protocol Covered Documents’ applies, what will be the Implementation Date for that Protocol Covered Document?
  5. Revocation
    1. Can I revoke my participation in the Protocol?
  6. General
    1. What is a conformed copy?
    2. Who is an authorized signatory?
    3. Is there a closing date for the Protocol?
    4. Can I change the text of the Adherence Letter?
    5. Are there any costs to adhere to the Protocol?
    6. Will ISDA confirm whether non-ISDA documents are effectively amended by the Protocol?

You can download the full FAQ here.

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