Frequently Asked Questions

ISDA has prepared this brief summary of frequently asked questions to assist in your consideration of the ISDA Japan Corporate Calculation Agent City Protocol (the "Protocol").

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

Adherence Letter Submission Process

When do I need to send in my Adherence Letter?
The Protocol will be open from January 12, 2010 and will close at 5pm NY time on January 22, 2010.

How do I send in my Adherence Letter?
All Adherence Letters must be delivered by email to japancacprotocol@isda.org. In the email, you must submit both your conformed and executed copies of the Adherence Letter.

The Adherence Letter(s) should be on your institution’s letterhead. Nothing in the form Adherence Letter available on ISDA's website may be changed with the exception of completing the details of your institutional name, date and signature block.
You are not required to send your original Adherence Letter(s) by mail to ISDA.

What is a conformed copy?
A conformed copy of the Adherence Letter means that the name of the authorized signatory (for example, Patricia Smith) is typed rather than having Patricia Smith’s actual signature on the letter. ISDA only posts on its website the conformed copy of all Adherence Letters.
You must also submit an executed, or signed, copy of the Adherence Letter in addition to the conformed copy of the Adherence Letter. ISDA keeps the executed copy of the Adherence Letter for its files and does not share the executed copy with anyone else.

Who is an authorized signatory?
An authorized signatory to the Adherence Letter is an individual who has the legal authority to bind the adhering institution.

What if I am an investment or asset manager – how do I complete the signature block?
If you are an investment or asset manager and act on behalf of multiple funds, you must indicate the following in the signature block: "Investment/Asset Manager, acting on behalf of the funds and accounts listed in the relevant Governing Master Agreement between it and another Adhering Party". A separate Adherence Letter for each fund or account does not need to be submitted to ISDA. Further, no specific names of clients of the investment/asset manager will be publicly disclosed on the ISDA website in connection with the Protocol.

As an alternative, an investment or asset manager may list the specific funds that are adhering to the Protocol, by indicating in the signature block: “Investment/Asset Manager, acting on behalf of the funds and accounts listed in the attachment to this Adherence Letter”.  Please note that in this case the names of those funds will be publicly disclosed on the ISDA website.

Can I change the text of the Adherence Letter?
No. The Adherence Letter must be in the same format as the form letter published in the ISDA Japan Corporate Calculation Agent City Protocol. You may obtain a copy of the form Adherence Letter by visiting the ISDA website, www.isda.org and clicking on ISDA Japan Corporate Calculation Agent City Protocol and then clicking on Form of Adherence Letter.


Does it cost any money to adhere to the Protocol?
No.

Details relating to the Protocol

What does the Protocol do?
The goal of the Protocol is to change the Calculation Agent City from London (or any other city which is not Tokyo) to Tokyo for transactions that are covered by the Protocol.

What transactions are covered by the Protocol?
Only single name Credit Derivative Transactions with a Confirmation that identifies or has the effect of identifying "Japan Corporate" as the relevant Transaction Type with respect to the Reference Entity are covered by the Protocol. This Protocol does not cover Credit Derivative Transactions that are associated with a credit linked note; bespoke portfolio transactions; and index transactions (including CDX and Itraxx Tranched and Untranched).

All existing transactions that come within the immediately preceding paragraph are covered by the Protocol, even if they were entered into after December 2007.   References in the press release relating to this Protocol to trades dated before December 2007 are to provide background only.  Prior to December 2007, the choice of Calculation Agent City in respect of the type of transactions discussed here was less consistent.  However, since that time, there has been consensus among market participants in favour of Tokyo (and that consensus has been reflected in the Physical Settlement Matrix published by ISDA).