ISDA proceeds with development of industry notices hub
02 July 2024 US
Image: Pornarun/stock.adobe.com
The International Swaps and Derivatives Association (ISDA) has decided to proceed with the development of an industry-wide notices hub, following support from dealers and buy side institutions globally.
The new online platform is designed to allow immediate delivery and receipt of critical termination-related notices, while also ensuring address details are up to date, to prevent uncertainty and potential losses for senders and recipients.
It will also enable market participants to update their physical address via a single entry.
Following an industry outreach initiative in April — in which ISDA sought indications of support for the proposed platform — buy side firms, including asset managers, insurance companies and hedge funds, made up 57 per cent of respondents who were in favour of the new platform.
ISDA will work alongside S&P Global Market Intelligence and Linklaters to build the platform, draft the necessary documentation and commission legal opinions in priority jurisdictions to confirm the validity of delivering notices via a central hub.
The ISDA Notices Hub will be free for buy side users and available through S&P Global Market Intelligence’s Counterparty Manager platform, with implementation targeted for 2025.
Under the ISDA Master Agreement, termination-related notices must be delivered by certain prescribed methods including physical delivery, but delays can occur if a company has not updated its address after moving, or if delivery is interrupted by geopolitical shocks.
The ISDA Notices Hub would act as a secure central platform for firms to deliver notices, with automatic alerts sent to the receiving entity.
A number of designated people at each firm will be able to access the hub from anywhere in the world, regardless of the situation at its physical location.
ISDA’s Chief Executive Scott O’Malia says: “We’re delighted that so many financial institutions recognise the benefit of having a secure digital platform that allows termination notices to be delivered and received in the blink of an eye.
“As well as increasing certainty for users, the ISDA Notices Hub will eliminate risk exposures and potential losses that can result from delays in terminating derivatives contracts.”
The new online platform is designed to allow immediate delivery and receipt of critical termination-related notices, while also ensuring address details are up to date, to prevent uncertainty and potential losses for senders and recipients.
It will also enable market participants to update their physical address via a single entry.
Following an industry outreach initiative in April — in which ISDA sought indications of support for the proposed platform — buy side firms, including asset managers, insurance companies and hedge funds, made up 57 per cent of respondents who were in favour of the new platform.
ISDA will work alongside S&P Global Market Intelligence and Linklaters to build the platform, draft the necessary documentation and commission legal opinions in priority jurisdictions to confirm the validity of delivering notices via a central hub.
The ISDA Notices Hub will be free for buy side users and available through S&P Global Market Intelligence’s Counterparty Manager platform, with implementation targeted for 2025.
Under the ISDA Master Agreement, termination-related notices must be delivered by certain prescribed methods including physical delivery, but delays can occur if a company has not updated its address after moving, or if delivery is interrupted by geopolitical shocks.
The ISDA Notices Hub would act as a secure central platform for firms to deliver notices, with automatic alerts sent to the receiving entity.
A number of designated people at each firm will be able to access the hub from anywhere in the world, regardless of the situation at its physical location.
ISDA’s Chief Executive Scott O’Malia says: “We’re delighted that so many financial institutions recognise the benefit of having a secure digital platform that allows termination notices to be delivered and received in the blink of an eye.
“As well as increasing certainty for users, the ISDA Notices Hub will eliminate risk exposures and potential losses that can result from delays in terminating derivatives contracts.”
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