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ISDA Resolution Stay Jurisdictional Modular Protocol
The International Swaps and Derivatives Association, Inc. (ISDA) has published the ISDA Resolution Stay Jurisdictional Modular Protocol (ISDA JMP). The ISDA JMP will enable parties to amend the terms of Protocol Covered Agreements to aid compliance with certain regulatory requirements in various jurisdictions which, in general, require entities subject to those regulatory requirements to obtain from their counterparties a contractual recognition of the application of stays on or overrides of certain termination rights under the home-country special resolution regime (SRR) of such regulated entity (Stay Regulations). The ISDA JMP was developed specifically to provide a means for the broader market to comply with the requirements of Stay Regulations. The ISDA JMP is composed of boilerplate provisions and jurisdictional modules with respect to particular Stay Regulations in particular jurisdictions (Jurisdictional Modules). Parties may choose to adhere to one or more Jurisdictional Modules to the ISDA JMP.
ISDA previously published the ISDA 2015 Universal Resolution Stay Protocol (ISDA 2015 Universal Protocol) on 12th November 2015, see link. While any entity may adhere to the ISDA 2015 Universal Protocol, it is expected that the buyside generally will not adhere to the ISDA 2015 Universal Protocol, but instead to the ISDA JMP. The ISDA JMP is aimed at achieving the same policy goals as the ISDA 2015 Universal Protocol with respect to the orderly resolution of systemically important financial institutions. While the ISDA 2015 Universal Protocol was developed in advance of Stay Regulations, the operative provisions of the ISDA JMP are being developed to facilitate compliance with Stay Regulations in different jurisdictions. Therefore, the ISDA JMP is a standalone protocol. Nevertheless, the operative provisions of the ISDA JMP are aimed at achieving an outcome substantially similar to the outcome under Section 1 of the ISDA 2015 Universal Protocol, which results in counterparties to financial institutions consenting to be subject to stays on or overrides of certain termination rights under SRRs, notwithstanding the governing law of their agreements.
Please refer to the “Frequently Asked Questions” below for more information on the background and substance of the ISDA JMP. Further “Frequently Asked Questions” will be provided in due course.
The ISDA JMP is open to ISDA members and non-members. Parties will pay a one-time fee of $500 to ISDA for each adherence to a Jurisdictional Module. There is no cut-off date to the ISDA JMP or any Jurisdictional Module. ISDA does, however, reserve the right to designate a cut-off date by giving 30 days’ notice on this site.
- ISDA Resolution Stay Jurisdictional Modular Protocol - Text
- ISDA Resolution Stay Jurisdictional Modular Protocol - General FAQs
- ISDA JMP Sample Module Adherence Notice
- ISDA JMP Sample Underlying Funds Notice
- ISDA Webinar on the ISDA JMP and accompanying slides
- ISDA Amend Webcast
- Legal Opinion - UK
- Legal Opinion - US
Modules Open for Adherence
ISDA Japanese Jurisdictional Module to the ISDA Resolution Stay Jurisdictional Modular ProtocolOpen from January 5, 2017
The ISDA Japanese Jurisdictional Module enables compliance with the amendments to the Comprehensive Guidelines issued by Japanese Financial Services Agency (the JFSA) regarding contractual stays in certain financial contracts governed by non-Japanese law (Japanese Regulation).
ISDA German Jurisdictional Module to the ISDA Resolution Stay Jurisdictional Modular ProtocolOpen from June 28, 2016
The German Jurisdictional Module enables parties to amend the terms of their Covered Agreements with entities subject to German legal requirements to obtain from certain counterparties a contractual recognition of the application of stays on termination under the German special resolution regime.
ISDA UK (PRA Rule) Jurisdictional Module to the ISDA Resolution Stay Jurisdictional Modular ProtocolOpen from May 3, 2016
The UK (PRA Rule) Jurisdictional Module enables entities subject to the UK Prudential Regulation Authority’s (UK PRA) final rule on contractual stays in financial contracts governed by third-country law to amend the terms of their Covered Agreements with certain counterparties to comply with the PRA’s final rule, by obtaining from such counterparties a contractual recognition of the application of stays on or overrides of termination rights under the UK Banking Act, as required by the UK PRA final rule.