Opinions


Access to opinions and opinion summaries are among the prime
benefits of ISDA membership.

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Click here to view current status of Netting Legislation

Netting and Collateral

A Master Agreement has established international contractual standards governing privately negotiated derivatives transactions that reduce legal uncertainty and allow for reduction of credit risk through netting of contractual obligations. Ensuring the enforceability of the netting provisions of the ISDA Master Agreement remains a key initiative for the Association.

The scope of the ISDA opinions address the enforceability of the termination, bilateral close-out netting and multibranch netting provisions of the 1992 and 2002 Master Agreements. Opinions are updated annually to comply with requests from various central banks. In addition, ISDA also solicits legal opinions on the enforceability of the ISDA Credit Support Documents in various jurisdictions, also updated on an annual basis.

Public netting documents

To access either of the following documents please click on the relevant link below:

2006 ISDA Model Netting Act, Version 2 - October 10, 2007

Memorandum on the Implementation of the Model Netting Act - March 1, 2006

Client Clearing Opinions

  • Principal to Principal Model

ISDA has addressed the enforceability of the close-out, set-off and default provisions of the ISDA/FIA Client Cleared OTC Derivatives Addendum when used in conjunction with any form of the Master Agreement. The Addendum works in conjunction with an existing master agreement to facilitate the standardised documentation of client clearing and to support delivery of the client protections used by central counterparties on the default of a clearing member.

The Addendum operates on the principal-to-principal client clearing model and is designed to operate on a cross CCP basis in conjunction with any non-US CCP that adopts a client clearing structure capable of being used with the Addendum.

ISDA opinions are produced either for reliance by a Clearing Member entering into an Addendum with a Client located in a particular jurisdiction or for reliance by a Client entering into an Addendum with a Clearing Member located in a particular jurisdiction.

  • CRR Article 305(2)(c)

ISDA is also currently in the process of commissioning a number of clearing related legal opinions to assist ISDA members to apply the risk weightings under CRR Article 305. One of the conditions to apply the reduced risk weightings under Article 305 is that the client of a clearing member has a legal opinion that it would bear “no losses” on account of the insolvency of its clearing member or any of the clearing member’s clients under the laws of the jurisdiction of various related entities. A modular architecture will be used to prepare these opinions.

 

ISDA OPINIONS LIBRARY

The opinions made available by ISDA to ISDA members do not incur any additional charges and are a membership benefit provided by ISDA.


JurisdictionNettingCollateralAddendum - Clearing Member RelianceAddendum - Client Reliance
Anguilla
Yes
Yes
No
No
Austria
Yes
Yes
Yes
No
Australia
Yes
Yes
Yes
No
Barbados
Yes
Yes
No
No
Bahamas
Yes
Yes
No
No
Belgium
Yes
Yes
Yes
No
Bermuda
Yes
Yes
Yes
No
Brazil
Yes
Yes
No
No
British Virgin Islands
Yes
Yes
No
No
Canada
Yes
Yes
Commissioned
No