How to Join

The Central and Eastern Europe/EMEA Committee was established to promote the understanding of the ISDA Master Agreement and to advocate the necessity of netting being enforceable in regard to OTC derivatives trading in Central and Eastern Europe/EMEA. In March 2000 ISDA was contracted by the EBRD to promote netting in up to five jurisdictions (N.B. ISDA submission on netting to European Commission dated February 13, 2004 and August 1, 2005). Efforts to date have concentrated on the first wave of primary EU accession countries. In the meantime, ISDA has provided draft netting legislation to relevant ministries in the Czech Republic, Hungary and Slovakia. Since 2004, ISDA has been suggesting to the European Commission to consider introducing an EU instrument to harmonize the legal regime for close-out netting and set-off across all EU member states. This far, EU law does not provide a single definition for netting and set-off. The European Commission’s report on the evaluation of the implementation of the Financial Collateral Arrangements Directive (EU Collateral Directive), which was published in December 2006, addresses the need for harmonization..

Since the mid-1990s ISDA has been involved in technical assistance regarding drafting of legislation relevant to derivatives in the Czech Republic, Hungary, Poland and Slovakia. Subsequently, ISDA netting opinions on all four countries were published, plus an ISDA collateral opinion on Hungary. The implementation of the EU Collateral Directive in several EU member states still poses problems for the markets, eg the Czech Republic and Poland. ISDA is working with market participants and regulators in the relevant countries to change that. ISDA is also monitoring the implementation process of the EU Collateral Directive in CEE countries. For ISDA’s views on the evaluation of the implementation of the EU collateral directive, please click here. Regarding developments in EU candidate countries, ISDA has published memoranda on the redenomination of the Romanian currency (as of July 1, 2005) and the status of implementation of the EU collateral directive. ISDA is also discussing the legal framework for derivatives in Croatia. ISDA has commissioned netting opinions for Malta and Slovakia.

In addition to work underway in CEE and CIS countries, ISDA is also monitoring and supporting relevant legislative developments in Greece and Turkey. ISDA netting opinions on Greece and Turkey have been published. An ISDA collateral opinion on Turkey has been published in late 2005. In Israel, ISDA has commented on several versions of the draft law on financial agreements (ISDA letters sent to the Israeli MoJ dated December 13, 2004), (July 28, 2005) and (February 17, 2006). ISDA has published an Israeli netting opinion in June 2007..

In Russia, ISDA has met and is cooperating with the parliamentary subcommittees in charge of drafting legislation affecting derivatives. The various draft bills are aiming at introducing comprehensive legislation addressing insolvency (close-out netting), banking, contractual an other issues. ISDA has commented on various drafts and has contacted regulators (eg by letter of November 24, 2004 and December 15, 2005), draft bill amending Art 1062 of the Civil Code (letter dated June 8, 2006) and re draft bill amending the Federal Law on Insolvency of Credit Institutions (letter dated September 21, 2007). ISDA has also started looking into the legal framework for OTC derivatives transactions in Kazakhstan (ISDA letters to the National Bank of Kazakhstan and the Agency for the Regulation and Supervision of the Financial Market and Financial Organizations dated April 15, 2007).

In Africa, ISDA is assisting in drafting the Mauritius Draft Netting of Financial Contracts and Applicable Law of Securities Act 2007. Other African countries under discussions include Morocco.

ISDA announced the publication of the 2006 Model Netting Act on March 27 and an accompanying memorandum regarding the implementation of the Model Netting Act. The 2006 Model Netting Act replaces the version published in 2002. The accompanying memorandum is designed to answer issues presented by legislators, in particular addressing issues that arise in civil law jurisdictions.

Islamic Finance Law Group

In May 2003, the Islamic Finance Law Group started to look at legal and regulatory issues affecting the derivatives industry in Islamic jurisdictions. The Working Group focuses on the following jurisdictions: UAE (Abu Dhabi, Dubai), Bahrain, Saudi Arabia, Qatar, Kuwait plus Malaysia. Also, the Working Group is looking into the issue of Islamic law-compatible ISDA documentation. In January 2005, ISDA submitted letters to regulators in the Gulf region (Bahrain, Kuwait, Qatar, Saudi Arabia, UAE) and Malaysia to explore views on regulatory treatment of OTC derivatives transactions documented under ISDA in light of local law, esp Islamic law as applied locally. Re Pakistan, ISDA has submitted technical comments on the Draft Netting of Financial Contracts Act, 2005 (August 2005) and on the Draft Banking Act, 2006 (July 2006). In September 2006, ISDA and IIFM agreed to develop Shariah compliant documentation for OTC derivatives transactions.

• Staff Contact: Peter Werner -- pwerner@isda.org

In all the target countries ISDA undertakes:

• Lobbying to promote understanding of need for netting legislation
• Regular meetings with local representatives and authorities
• Assistance provided to local initiatives re drafting netting legislation