ISDA Protocol: Introduction
ISDA 2020 IBOR FALLBACKS PROTOCOL: ADHERENCE
Interbank Offered Rates (IBORs), which include the London Interbank Offered Rates (LIBOR) are expected to be discontinued after 31 December 2021 and replaced with certain Alternative Reference Rates (ARRs), except for certain USD LIBOR tenors, which are expected to be discontinued after 30 June 2023. LIBOR and IBOR rates have historically be used as the reference rate in respect of a significant proportion of derivatives transactions, including, potentially, a material proportion of your derivative transactions.
The International Swaps and Derivatives Association (ISDA) has published the ISDA 2020 IBOR Fallbacks Protocol (the “ISDA Protocol”) in January 2021 to facilitate the transition from IBORs to ARRs in respect of legacy derivative transactions. In addition, ISDA has published a supplement to the 2006 ISDA Definitions (the “Supplement”) to facilitate the transition of new IBOR based derivative transactions to ARRs.
ADCB adhered to the ISDA Protocol in January 2021 and encourages all of its clients to inform themselves about the ISDA Protocol and the Supplement and consider whether it would be appropriate for them to adhere to the ISDA Protocol. ADCB has prepared these materials to assist your decision making process. These materials have been drawn from public sources and links have been provided to enable you to access the source information.
As part of the global transition from IBORs to ARRs, many leading regulators and industry groups2345 are encouraging market participants to adhere to the ISDA Protocol.