Opinions Overview

A Master Agreement has established international contractual standards governing privately negotiated derivatives transactions that reduce legal uncertainty and allow for reduction of credit risk through netting of contractual obligations. Ensuring the enforceability of the netting provisions of the ISDA Master Agreement remains a key initiative for the Association.  The ISDA netting opinions address the enforceability of the termination, bilateral close-out netting and multibranch netting provisions of the 1992 and 2002 Master Agreements. In addition, ISDA has commissioned legal opinions on the enforceability of the ISDA Credit Support Documents in various jurisdictions. ISDA has published netting opinions covering over 73 jurisdictions and collateral opinions covering over 55 jurisdictions. The opinions are generally updated on an annual basis.

As International Financial Institutions (IFIs) are different to other counterparties covered by ISDA’s opinions, ISDA’s IFI opinions take a different approach and structure to ISDA's netting and collateral opinions. The concern of the opinions is enforceability against an IFI of the close-out netting provisions of the ISDA Master Agreement by private parties in domestic courts, whether in terms of withstanding a challenge by an IFI to the effectiveness of a counterparty’s exercise of termination and netting rights or, if immunity is not a bar, by invoking judicial process against the IFI. Such opinions therefore are intended to provide analysis by reference to the domestic governing law of the ISDA Master Agreements and the domestic law of the jurisdiction where an IFI is based.  To the extent that principles of public international law or IFI treaty terms provide the rule of decision to a domestic court, or are relevant as background facts in applying domestic legal rules, the opinions will make reference to such principles and terms.

Please find a brief presentation with additional information here.

Status of ISDA IFI Opinions

2018 ISDA Model Netting Act and Guide - October 15, 2018

Model Netting Act Webinar

Benefits of Close-out Netting of Derivative Transactions - June 29, 2016

Contracts are increasingly being executed and formed electronically. Several countries around the globe, including the Middle Eastern and Asia-Pacific regions, have enacted legislation in the area of electronic commerce based on various types of UNCITRAL model provisions and treaties, e.g., the 2005 UN Convention on the Use of Electronic Communications in International Contracts, the 1996 UNCITRAL Model Law on Electronic Commerce and the 2001 Model Law on Electronic Signatures”. These instruments include provisions relevant to financial contracts, including foreign exchange and securities transactions.  ISDA’s e-contract opinions look at the enforceability of electronically executed and electronically confirmed contracts under the laws of various jurisdictions in the context of transactions under the ISDA Master Agreement which may be entered into by means of electronic data interchange or other means of electronic communication.

Principal to Principal Model (P2P) ISDA has addressed the enforceability of the close-out, set-off and default provisions of the ISDA/FIA Client Cleared OTC Derivatives Addendum (the "P2P Addendum") when used in conjunction with the form of the Master Agreement. The P2P Addendum works in conjunction with an existing master agreement to facilitate the standardised documentation of client clearing and to support delivery of the client protections used by central counterparties on the default of a clearing member. The P2P Addendum operates on the principal-to-principal client clearing model and is designed to operate on a cross CCP basis in conjunction with any non-US CCP that adopts a client clearing structure capable of being used with the P2P Addendum.

ISDA opinions are produced either for reliance by a Clearing Member (CM) entering into a P2P Addendum with a Client located in a particular jurisdiction or for reliance by a Client entering into a P2P Addendum with a CM located in a particular jurisdiction.

CRR Article 305(2)(c)

ISDA has published a number of clearing related legal opinions to assist ISDA members to apply the risk weightings under CRR Article 305. One of the conditions to apply the reduced risk weightings under Article 305 is that the client of a clearing member has a legal opinion that it would bear “no losses” on account of the insolvency of its clearing member or any of the clearing member’s clients under the laws of the jurisdiction of various related entities. A modular architecture has been used to prepare these opinions.

CRR Article 305(2)(c) opinions – Note to ISDA members

CRR Article 305(2)(c) opinions status

US FCM Model ISDA and FIA jointly commission and publish, for the benefit of their members, legal reviews addressing the enforceability of a US registered FCM’s close out and netting rights vis-à-vis its customers in various jurisdictions under the FIA-ISDA Cleared Derivatives Addendum. These legal reviews are based on assumptions regarding the content of the underlying futures and options agreement that is supplemented by the FIA-ISDA Cleared Derivatives Addendum between an FCM and a customer.

ISDA and FIA also commission and publish for the benefit of their members, legal reviews addressing the ability of customers to net against their respective FCMs when using the FIA-ISDA Cleared Derivatives Addendum and against three CCPs that support the FCM model of clearing (CME, ICE and LCH).

aosphere is Allen & Overy’s online legal subscription business, offering two services which extract data from the ISDA netting and collateral opinions, presenting them in an online “traffic light” colour coded report. Subscribers have unlimited access across their organisation.

netalytics, a joint venture with ISDA, analyses the information contained in ISDA's netting opinions, extracts core information across all jurisdictions and presents it in an easy-to-read, standard format.

CSAnalytics helps firms to easily determine the most straightforward and effective way to take collateral from a counterparty, reducing the time and costs associated with this analysis.

ISDA members can benefit from a free trial of netalytics and CSAnalytics. Find out more here.

The opinions are made available by ISDA to ISDA members as part of their membership and do not incur any additional charges. Please note that each opinion will have various assumptions and qualifications relevant to the jurisdiction and analysis provided and therefore each opinion must be read in detail before relying on the conclusions reached within such opinions.

Jurisdiction Netting Collateral Addendum P2P CM Reliance Addendum P2P Client Reliance FCM Reliance E-contracts* Core
Anguilla
Yes
Yes
Commissioned
No
No
No
No
Argentina
Yes
No
No
No
No
No
No
Armenia
Yes
No
No
No
No
No
No
Australia
Yes
Yes
Yes
Yes
Yes
Yes
Pending
Austria
Yes
Yes
Yes
Commissioned
No
Yes
Yes
Bahamas
Yes
Yes
Commissioned
No
Yes
No
Pending
Barbados
Yes
Yes
Commissioned
No
No
No
No
Belgium
Yes
Yes
Yes
Yes
No
Yes
Yes
Bermuda
Yes
Yes
Yes
No
Yes
No
Yes
Brazil
Yes
Yes
Yes
No
Yes
No
Pending
British Virgin Islands
Yes
Yes
Yes
No
Yes
Yes
Pending
Canada
Yes
Yes
Yes
Commissioned
Yes
Yes
Pending
Cayman Islands
Yes
Yes
Yes
Yes
Yes
Yes
Pending
Channel Islands - Guernsey
Yes
Yes
Yes
No
Yes
No
Yes
Channel Islands - Jersey
Yes
Yes
Yes
No
Yes
No
Yes
Chile
Yes
Yes
Commissioned
No
No
Yes
No
Colombia
Yes
Yes
Commissioned
No
No
No
No
Curacao, Aruba, St Maarten
Yes
Yes
No
No
Yes
No
No
Cyprus
Yes
Yes
Yes
No
No
No
Pending
Czech Republic
Yes
Yes
Yes
Yes
No
No
Yes
Denmark
Yes
Yes
Yes
Yes
No
Yes
Yes
England & Wales
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Finland
Yes
Yes
Yes
No
No
Yes
Pending
France
Yes
Yes
Yes
Yes
Yes
Yes
Pending
Germany
Yes
Yes
Yes
Yes
Yes
Yes
Pending
Greece
Yes
Yes
Yes
No
No
No
Yes
Hong Kong
Yes
Yes
Yes
Yes
Yes
Yes
Pending
Hungary
Yes
Yes
Yes
Yes
No
No
Yes
Iceland
Yes
Yes
Yes
No
No
No
Yes
India
Yes
Yes
Yes
No
No
Yes
No
Indonesia
Yes
Yes
No
No
No
No
No
Ireland
Yes
Yes
Yes
Yes
Commissioned
Yes
Yes
Israel
Yes
Yes
Yes
No
No
No
Pending
Italy
Yes
Yes
Yes
Yes
Commissioned
Yes
Pending
Japan
Yes
Yes
Yes
Commissioned
Yes
No
Yes
Liechtenstein
Yes
No
No
No
No
No
No
Luxembourg
Yes
Yes
Yes
Yes
Yes
Yes
Pending
Lithuania
Yes
No
No
No
No
No
No
Malaysia
Yes
Yes
Yes
No
No
Yes
No
Malta
Yes
Yes
Yes
No
No
No
Yes
Mauritius
Yes
No
No
No
No
No
No
Mexico
Yes
Yes
Yes
No
No
Yes
No
Netherlands
Yes
Yes
Yes
Yes
Yes
Yes
Pending
New Zealand
Yes
Yes
Yes
Commissioned
Yes
No
No
Norway
Yes
Yes
Yes
No
Yes
Yes
Pending
Peru
Yes
Yes
No
No
No
No
No
Philippines
Yes
Yes
Yes
No
No
No
Pending
Poland
Yes
Yes
Yes
Yes
No
No
Pending
Portugal
Yes
Yes
Yes
No
No
No
Yes
Qatar (QFC)
Yes
No
No
No
No
No
No
Romania
Yes
Yes
No
No
No
No
No
Russia
Yes
No
No
No
No
No
No
Scotland
Yes
Yes
Yes
Yes
No
No
Yes
Serbia
Yes
No
No
No
No
No
No
Singapore
Yes
Yes
Yes
Yes
Yes
Yes
Pending
Slovakia
Yes
No
No
No
No
No
Yes
Slovenia
Yes
Commissioned
No
No
No
No
Pending
South Africa
Yes
Yes
Commissioned
No
No
No
Pending
South Korea
Yes
Yes
Yes
No
No
Yes
Pending
Spain
Yes
Yes
Yes
Yes
No
Yes
Pending
Sweden
Yes
Yes
Yes
Yes
No
Yes
Yes
Switzerland
Yes
Yes
Yes
Yes
Commissioned
No
Pending
Taiwan
Yes
Yes
Yes
No
No
No
Pending
Thailand
Yes
Yes
Yes
No
No
Yes
Pending
Turkey
Yes
Yes
Yes
No
No
No
Yes
UAE - Abu Dhabi Global Market (ADGM)
Yes
Commissioned
No
No
No
No
No
UAE (DIFC Free Zone)
Yes
No
No
No
No
No
No
UAE (Federal)
Yes
No
No
No
No
No
No
USA
Yes
Yes
No
No
Yes
No
Pending

*E-contract opinions are also available for Bahrain, Egypt, Kuwait, Nigeria, Saudi Arabia, Qatar and UAE.