1. Protocols
  2. ISDA 2020 IBOR Fallbacks Protocol

Open from October 23, 2020

The ISDA 2020 IBOR Fallbacks Protocol (this Protocol) was created to enable parties to Protocol Covered Documents to amend the terms of each such Protocol Covered Document to (i) in respect of a Protocol Covered Document which incorporates, or references a rate as defined in, a Covered ISDA Definitions Booklet, include in the terms of such Protocol Covered Document either the terms of, or a particular defined term included in, the Supplement to the 2006 ISDA Definitions, finalized on Friday, October 23, 2020 and to be published by ISDA and effective on Monday, January 25, 2021 (the IBOR Fallbacks Supplement) and (ii) in respect of a Protocol Covered Document which otherwise references a Relevant IBOR, include in the terms of such Protocol Covered Document new fallbacks for that Relevant IBOR.

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

The ISDA 2020 IBOR Fallbacks Protocol is open to ISDA members and non-members. 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 webpage.

ISDA 2020 IBOR Fallbacks Protocol (IBOR Fallbacks Protocol) FAQs

ISDA has prepared this list of frequently asked questions to assist in your consideration of the IBOR Fallbacks Protocol. Unless otherwise defined herein, capitalized terms used in these FAQs have the meanings given to them in the IBOR Fallbacks Protocol, the Supplement to the 2006 ISDA Definitions, finalized on Friday, October 23, 2020 and to be published by ISDA and effective on Monday, January 25, 2021 (the IBOR Fallbacks Supplement) or the 2006 ISDA Definitions (as will be amended by the IBOR Fallbacks Supplement).

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

Introduction

The IBOR Fallbacks Protocol enables market participants who are party to a Protocol Covered Document to (i) incorporate either the terms of, or a particular defined term included in, the IBOR Fallbacks Supplement in the terms of their Protocol Covered Document if that Protocol Covered Document incorporates, or references a rate as defined in, a Covered ISDA Definitions Booklet; and/or (ii) include new fallbacks for a relevant interbank offered rate (IBOR) in the terms of their Protocol Covered Document if their Protocol Covered Document otherwise references an IBOR.

List of Questions

The next section sets out questions and answers that are designed to explain the basic operation and application of the IBOR Fallbacks Protocol. They cover:

  1. Who can adhere to the IBOR Fallbacks Protocol?
    A. What kinds of entities can adhere to the IBOR Fallbacks Protocol?
    B. Can entities that are not ISDA members adhere to the IBOR Fallbacks Protocol?
  1. What does the IBOR Fallbacks Protocol do?
    A. What should I consider when determining whether to amend my Protocol Covered Documents by adhering to the IBOR Fallbacks Protocol?
    B. Does the IBOR Fallbacks Protocol override bespoke terms that I have agreed?
  1. What does the IBOR Fallbacks Supplement do?
  1. What IBORs and documents are in scope of the IBOR Fallbacks Protocol?
    A. What is a Relevant IBOR?
    B. If I adhere, will the IBOR Fallbacks Protocol apply to all of my master agreements, credit support documents and confirmations or just some of them?
    C. What are Protocol Covered Documents?
    D. What are Protocol Covered Master Agreements?
    E. What are Protocol Covered Credit Support Documents?
    F. What are Protocol Covered Confirmations?
    G. What is a Covered ISDA Definitions Booklet?
    H. Will the IBOR Fallbacks Protocol apply to non-ISDA master agreements and non-ISDA credit support documents?
    I. Does the IBOR Fallbacks Protocol apply to documentation governing cleared transactions?
  1. What happens if an Index Cessation Event occurs with respect to a Relevant IBOR?
    A. What happens if both pre-cessation and permanent cessation triggers occur with respect to a Relevant IBOR?
    B. What happens if more than one Index Cessation Event of the same type occurs in relation to a Relevant IBOR?
    C. What happens if only the permanent cessation trigger applies (for example, for a Relevant IBOR which is not LIBOR)?
    D. What happens if I have bilaterally opted out of a pre-cessation trigger?
    E. What happens if a Relevant IBOR is discontinued on the day on which it is ordinarily observed?
  1. What happens if only certain tenors of a Relevant IBOR are permanently discontinued or, in respect of LIBOR, become Non-Representative?
  1. Does the IBOR Fallbacks Supplement address Calculation Periods or Compounding Periods to which ‘Linear Interpolation’ is specified to apply (for example, stub periods or other non-standard periods)?
  1. When does the IBOR Fallbacks Protocol become effective?
    A. When is the Protocol Effective Date?
    B. When is the agreement to make the amendments contemplated by the IBOR Fallbacks Protocol made?
    C. When are the amendments contemplated by the IBOR Fallbacks Protocol actually made?
  1. How do I adhere to and implement the IBOR Fallbacks Protocol?
    A. Is there a cut-off date for adherence to the IBOR Fallbacks Protocol?
    B. How do I submit an Adherence Letter?
    C. Is adherence public?
    D. Who is an authorized signatory?
    E. Can I change the text of the Adherence Letter?
    F. Are there any costs to adhere to the IBOR Fallbacks Protocol?
    G. Can I revoke my adherence to the IBOR Fallbacks Protocol?
    H. Can I include the amendments contemplated by the IBOR Fallbacks Protocol in my documents without adhering to the IBOR Fallbacks Protocol?
  1. Can an investment/asset manager or other Agent adhere to the IBOR Fallbacks Protocol on behalf of its Clients?
    A. Can an Agent adhere on behalf of all its Clients?
    B. Can an Agent adhere on behalf of certain of its Clients only?
    C. Will a Protocol Covered Document into which an Agent did not enter on behalf of its Client but that the Agent otherwise has the authority to amend be amended under the IBOR Fallbacks Protocol by virtue of the Agent adhering on behalf of its Client?
    D. 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 IBOR Fallbacks Protocol but before the Protocol Effective Date?
    E. What happens if an Agent adds a Client to an umbrella agreement that is an Agent Protocol Covered Document after adhering to the IBOR Fallbacks Protocol?
    F. If a Client adheres to the IBOR Fallbacks Protocol itself and an Agent which represents that Client also adheres to the IBOR Fallbacks Protocol on behalf of that Client, what will the Implementation Date be for any Protocol Covered Document?
    G. If an Agent that has entered into a Protocol Covered Document on behalf of a Client adheres to the IBOR Fallbacks 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 IBOR Fallbacks Protocol and identifies that Client as a Client on whose behalf it is amending Non-Agent Executed Protocol Covered Documents, what will be the Implementation Date for that Protocol Covered Document?
  1. Will the IBOR Fallbacks Protocol apply to novated transactions?
  1.  Can parties agree bilaterally to amend the terms or scope of the IBOR Fallbacks Protocol?
  1. Do the amendments made by the IBOR Fallbacks Protocol constitute a “Spread Provision” (as defined in the ISDA 2014 Collateral Agreement Negative Interest Protocol published on May 12, 2014 by ISDA)?
  1. Why does paragraph 3(a) of the Attachment to the IBOR Fallbacks Protocol delete “THB-THFIX-Reuters” from the IBOR Fallbacks Supplement and what about “THB-SOR-Telerate”?
  1. Is the ISDA 2018 Benchmarks Supplement Protocol the same as the new IBOR Fallbacks Protocol and can I just adhere to one of them?

You can download the full FAQ here.