ISDA Illegality/Force Majeure Protocol

The ISDA Illegality/Force Majeure Protocol (the “Protocol”) offers market participants an efficient way to amend their 1992 ISDA Master Agreements with the more sophisticated Illegality and Force Majeure provisions of the 2002 ISDA Master Agreement helping them to better address any issues that might arise if a Eurozone member state exited the Eurozone and imposed capital controls, potentially making it illegal for parties in that country to make Euro-denominated payments.

The key changes of the 2002 ISDA Master Agreement’s revamping of the Illegality Termination Event and introduction of the Force Majeure Termination Event include: (i) clarification that any transaction-specific fallbacks should take effect before these provisions apply,  (ii) removal of the obligation to attempt to transfer transactions before relying on the Illegality or Force Majeure Termination Event and (iii) providing for deferral of payments and deliveries during a waiting period before these provisions take effect (and for interest and compensation on those deferred payments and deliveries).

The published version of the Protocol includes additional modifications to the definition of "Protocol Covered Master Agreement," which are reflected in the blackline against the pre-publication version. These changes expand the Protocol's coverage to include 1992 Master Agreements containing an Impossibility Termination Event, and related modifications, as suggested in Section VIII of the User's Guide to the 1992 ISDA Master Agreements (1993 Edition) published by ISDA.

Please refer to the "Frequently Asked Questions" below for more information on both the Protocol’s substance and the adherence procedure.

The Protocol is open to ISDA members and non-members.  There is no cut-off date to this Protocol.  ISDA does however reserve the right to designate a cut-off date by giving 30 days notice on this site.