2022 ISDA Securities Financing Transactions Definitions

The SFT Definitions and related SFT Schedule Provisions have been drafted to allow for Securities Financing Transactions (SFTs), both stock loans and repurchase transactions, to be documented under an ISDA Master Agreement.  These documents allow parties to document stock loans, repurchase transactions and derivatives as part of a single close-out netting arrangement under an ISDA Master Agreement.

The SFT Definitions and the SFT Schedule Provisions are designed to be used in combination:

  • The SFT Definitions provide the mechanics for SFT products, including the standard terms for SFT transactions and margining, and include the implementing provisions for various optional approaches to govern the termination or acceleration of SFT transactions in the event a counterparty fails to perform. The SFT Definitions also contain the text of technical amendment provisions to the close-out calculations and other terms under the ISDA Master Agreement to account for unique features of SFT transactions and to preserve close-out netting across different types of SFT and derivatives transactions.
  • The SFT Schedule Provisions provide for elections with respect to SFTs documented under an ISDA Master Agreement, where those elections apply the relevant provisions from the SFT Definitions. The SFT Schedule Provisions also contain various carve-outs and amendments to standard ISDA Master Agreement provisions to allow the parties to customize aspects of their relationship for SFTs (e.g., carve-out SFTs from scope of credit support documents, Event of Default amendments, placeholders for SFT-specific tax provisions, and others).  The SFT Schedule Provisions are intended for negotiation between the counterparties so as to agree the general terms on which they wish to enter into SFTs under the ISDA Master Agreement.

Also included in a separate link are suggested forms of Confirmation for a stock loan and a repurchase transaction. These set out placeholders for the economic terms of individual transactions as well as other elections parties may wish to make. For many elections relating to SFT transactions, parties may choose to agree elections for a particular type of SFT at the relationship level as part of the SFT Schedule Provisions (in which case it is not necessary to repeat those terms in a Confirmation), or may choose to include elections at a transaction level in an individual Confirmation. The documents have been designed with an open architecture that allows for both approaches to be used in combination.

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