ISDA 2010 Hire Act Protocol

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ISDA HIRE Act Protocol: Market Education Call - August 27th, 2010

The ISDA 2010 Hire Act Protocol (the “Protocol”) offers market participants an efficient way to amend their Covered ISDA Master Agreements to reflect amendments to the U.S. tax law resulting from the enactment of the HIRE Act (the "Act") on March 18, 2010.  The Act imposes US withholding tax on payments made on any swap made after September 14, 2010 regardless of when the swap was entered into.

Please refer to the "Memo on Hire Act Protocol" for a summary of the changes to the ISDA Master Agreement and Schedule made by this Protocol.

The Protocol is open to ISDA members and non-members. There is no cut-off date to this protocol.  ISDA does however reserve the right to designate a cut-off date by giving 30 days notice on this site.

Pursuant to Section 2(a) of the ISDA 2010 HIRE Act Protocol, ISDA is designating a Cut-off Date under this Protocol of December 15, 2010.  After this date, ISDA will not accept any further Adherence Letters to the ISDA 2010 HIRE Act Protocol.  Existing adherence letters and amendments made by the terms of this Protocol are not impacted by this designation.

PLEASE NOTE: THIS PROTOCOL IS CLOSED.

The following documents must be submitted via email to the ISDA office in New York in order to adhere to the ISDA 2010 Hire Act Protocol :

  • One signed copy of the Adherence Letter, providing information on the contact person at the Adhering Party.
  • One conformed copy of the Adherence Letter. A conformed copy is an exact copy of the signed letter with the name of the person signing the letter typed on the signature line. A signature should not appear on the conformed copy of the letter.

ISDA will only accept email delivery of Adherence Letters. An Adhering Party is not required to send original Adherence Letters to the ISDA offices.

Please submit all Adherence Letters via email to hireactprotocol@isda.org. It is critical that both a scanned, signed Adherence Letter, as well as a scanned, conformed Adherence Letter is submitted. Entities will not be deemed to have adhered to the Protocol until both the signed and conformed Adherence Letters are submitted by email in accordance with the Adherence Period.

No other documents are required in order to adhere to the ISDA 2010 Hire Act Protocol. Supporting documentation, such as board resolutions or a list of authorized signatures, can be provided and will be held in safekeeping by ISDA, but it is not necessary to submit such documents in order to adhere to the Protocol. Access to supporting documentation will only be provided if requested in writing.

Email address for Delivery of Adherence Letters:
hireactprotocol@isda.org

Policy Regarding Conformed Copies
A signed copy and a conformed copy of an Adherence Letter must be received in order for ISDA to list a party as having adhered to the ISDA 2010 Hire Act Protocol.

The most common problem experienced in the adherence process for prior Protocols was the failure to include a conformed copy of the Adherence Letter. We remind parties that a conformed copy, together with a signed copy, must be submitted to ISDA in connection with adherence to the ISDA 2010 Hire Act Protocol.

Frequently Asked Questions

 

ISDA has prepared this brief summary of frequently asked questions to assist in your consideration of the ISDA 2010 Hire Act Protocol (the "Protocol").

THIS FREQUENTLY ASKED QUESTIONS DOES 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 PROTOCOL. PARTIES SHOULD CONSULT WITH THEIR LEGAL ADVISERS AND ANY OTHER ADVISER THEY DEEM APPROPRIATE PRIOR TO USING OR ADHERING TO THE PROTOCOL. ISDA ASSUMES NO RESPONSIBILITY FOR ANY USE TO WHICH ANY OF ITS DOCUMENTATION OR OTHER DOCUMENTATION MAY BE PUT.

Adherence Letter Submission Process
When do I need to send in my Adherence Letter? 
The Protocol opens on August 23, 2010. There is no closing date. ISDA does however reserve the right to designate a cut-off date by giving 30 days notice on this site.

How do I send in my Adherence Letter?
All Adherence Letters must be delivered by email to hireactprotocol@isda.org.  In the email, you must submit both your conformed and executed copies of the Adherence Letter.
The Adherence Letter(s) should be on your institution’s letterhead. Nothing in the form Adherence Letter available on ISDA's website may be changed with the exception of completing the details of your institutional name, date and signature block.
You are not required to send your original Adherence Letter(s) by mail to ISDA.

What is a conformed copy?
A conformed copy of the Adherence Letter means that the name of the authorized signatory (for example, Patricia Smith) is typed rather than having Patricia Smith’s actual signature on the letter. ISDA only posts on its website the conformed copy of all Adherence Letters.
You must also submit an executed, or signed, copy of the Adherence Letter in addition to the conformed copy of the Adherence Letter. ISDA keeps the executed copy of the Adherence Letter for its files and does not share the executed copy with anyone else.

Who is an authorized signatory?
An authorized signatory to the Adherence Letter is an individual who has the legal authority to bind the adhering institution.

What if I am an investment or asset manager – how do I complete the signature block?
If you are an investment or asset manager and act on behalf of multiple funds, you must indicate the following in the signature block: "Investment/Asset Manager, acting on behalf of the funds and accounts listed in the relevant Master Agreement between it and another Adhering Party". A separate Adherence Letter for each fund or account does not need to be submitted to ISDA. Further, no specific names of clients of the investment/asset manager will be publicly disclosed on the ISDA website in connection with the Protocol.

Can I change the text of the Adherence Letter?
No. The Adherence Letter must be in the same format as the form letter published in the ISDA 2010 Hire Act Protocol. You may obtain a copy of the form Adherence Letter by visiting the ISDA website, www.isda.org and clicking on "ISDA 2010 Hire Act Protocol" and then clicking on "Form of Adherence Letter".

Limited Right of Revocation
Can I revoke my participation in the Protocol? 
No. Once an Adherence Letter has been accepted by ISDA, an Adhering Party is bound by all amendments with other parties that have already adhered to the Protocol or, subject to the discussion below, that adhere before a designation of the Annual Revocation Date.
An Adhering Party may, at any time during the period from October 1 to October 31 of a calendar year, deliver to ISDA a notice specifying the Annual Revocation Date as its cut-off date in respect of amendments with future Adhering Parties. The effect of such a letter will be to withdraw adherence for future Adhering Parties as of December 31 in that calendar year. Although amendments already made will not be revoked, any subsequent adherence by new Adhering Parties after the designated Annual Revocation Date, will not bind the party that has submitted a Revocation Notice.

You can, however, bilaterally agree to amend your Covered Master Agreement with your counterparty (the other Adhering Party) and any such subsequent amendments will supersede those made by the Protocol to the extent that they are inconsistent.

Does it cost any money to adhere to the Protocol? 
No.

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