ISDA has published the third in a series of legal guidelines for smart derivatives contracts, intended to explain the core principles of ISDA collateral documentation and raise awareness among technology developers, collateral operations, risk managers and other key stakeholders of important legal and regulatory issues that must be considered when a technology solution is applied to the collateral management process.
The third paper provides guidelines to help the development and application of technology in the automation of collateral management. It describes:
- Current challenges that exist in the collateral management process and how they can be resolved through greater automation;
- The importance of increased standardization in creating the foundation for automated technology solutions;
- ISDA’s strategy for developing and delivering greater standardization and digitization of ISDA collateral documentation; and
- Existing legal standards as set out in ISDA’s collateral documentation and key points for technology developers to consider as they develop and implement new technology solutions within this legal and regulatory framework.
While the intention of this paper is not to specify or recommend any particular approach, or to address any particular technological application or project, these guidelines do suggest steps that should be taken to ensure the design and implementation of new technology solutions are consistent with existing legal and regulatory standards. It also highlights areas where further industry collaboration will be required to identify and resolve existing areas of legal and regulatory uncertainty.
Click on the PDF below to read the paper.
The first paper – Legal Guidelines for Smart Derivatives Contracts: Introduction – is available here.
The second paper – Legal Guidelines for Smart Derivatives Contracts: The ISDA Master Agreement – is available here.
Documents (1) for Legal Guidelines for Smart Derivatives Contracts: Collateral
Latest
FRTB Impact on Correlation Trading
The capitalization of the correlation trading portfolio (CTP) under the Fundamental Review of the Trading Book will have an adverse economic impact for users of these instruments. In particular, there is a lack of clarity and consistency in the application...
ISDA In Review – September 2025
A compendium of links to new documents, research papers, press releases and comment letters published by ISDA in September 2025.
A Path to Greater CFTC-SEC Alignment
Earlier this week, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) held a roundtable on regulatory harmonization – an initiative we wholeheartedly support. The US regulatory framework has evolved over time to facilitate financial markets...
Updated OTC Derivatives Compliance Calendar
ISDA has updated its global calendar of compliance deadlines and regulatory dates for the over-the-counter (OTC) derivatives space.