ISDA 2013 ICE Brent Protocol

Open from November 8, 2013

The ISDA 2013 ICE Brent Protocol (the “Protocol”) offers market participants an efficient way to amend the terms of certain derivatives transactions to address the impact of the decision by ICE Futures Europe (“ICE”) to (i) change expiry dates for ICE Brent futures and options contracts to a month-ahead expiry calendar with respect to March 2016 and later contract months (ii) require a cash adjustment as a result of such change (the “ICE Brent Transition”).  Given that the ICE Brent Transition will impact certain derivatives transactions that reference the relevant ICE Brent contracts, the Protocol specifies that (i) the ICE Brent Transition is not a Market Disruption Event or an Additional Market Disruption Event with respect to the relevant derivatives transactions and (ii) that the Calculation Agent will calculate a cash payment for the relevant derivatives transaction to reflect the ICE Brent Transition, based on the ICE cash adjustment provisions.

Please refer to the “Frequently Asked Questions” below for more information on the Protocol’s substance.

The Protocol is open to ISDA members and non-members. Parties will pay a one-time fee of U.S. $500 to ISDA to adhere to the Protocol. The cut-off date for this Protocol has been extended to Thursday December 5, 2013 (17:00 New York time). The effective date of the ICE Brent changes is Friday, December 6, and accordingly the Protocol deadline will not be extended beyond December 5.

ISDA 2013 ICE Brent Protocol FAQ

ISDA has prepared this list of frequently asked questions to assist in your consideration of the ISDA 2013 ICE Brent Protocol (the “Protocol”).

THESE FREQUENTLY ASKED QUESTIONS DO 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.

1. What does the Protocol do?

The Protocol offers market participants an efficient way to amend the terms of certain derivatives transactions to address the impact of the decision by ICE Futures Europe (“ICE”) to (i) change expiry dates for ICE Brent futures and options contracts to a month-ahead expiry calendar with respect to March 2016 and later contract months (ii) require a cash adjustment as a result of such change (the “ICE Brent Transition”). Given that the ICE Brent Transition will impact certain derivatives transactions that reference the relevant ICE Brent contracts, the Protocol specifies that (i) the ICE Brent Transition is not a Market Disruption Event or an Additional Market Disruption Event with respect to the relevant derivatives transactions and (ii) that the Calculation Agent will calculate a cash payment for the relevant derivatives transaction to reflect the ICE Brent Transition, based on the ICE cash adjustment provisions.

2. Is there a closing date for adherence to the Protocol?

The cut-off date for adherence has been extended to Thursday December 5, 2013 (17:00 New York time). The effective date of the ICE Brent changes is Friday, December 6, and accordingly the Protocol deadline will not be extended beyond December 5.

3. How do I submit my Adherence Letter?

Each Protocol participant executing an Adherence Letter will access the Protocol Management section of the ISDA website at www.isda.org to enter information online that is required to generate its form of Adherence Letter. Either by directly downloading the populated Adherence Letter from the Protocol Management system or upon receipt via e-mail of the populated Adherence Letter, each Protocol participant must print, sign and upload the signed Adherence Letter as a PDF (portable document format) attachment into the Protocol Management system. Once the signed Adherence Letter has been approved and accepted by ISDA, the Protocol participant will receive an e-mail confirmation of the Protocol participant’s adherence to the Protocol.

The Adherence Letter(s) should be on your institution’s letterhead, which you are able to upload into the Protocol Management system during the online submission of information to generate the Adherence Letter. Nothing in the form of 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. ISDA keeps the executed copy of the Adherence Letter for its files and does not share the executed copy with anyone else. Please do not send your original Adherence Letter(s) by mail to ISDA.

4. 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. A conformed copy of each Adherence Letter containing, in place of each signature, the printed or typewritten name of each signatory will be published by ISDA so that it may be viewed by all Protocol Participants.

5. Can entities that are not ISDA members sign up to the Protocol?

Yes. The Protocol is open to any entity. ISDA members and non-ISDA members alike adhere to the Protocol in the same way.

6. 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.

7. SPECIAL CONSIDERATIONS FOR INVESTMENT/ASSET MANAGERS

If you are an investment or asset manager and act on behalf of multiple funds (each referred to here as a “client”), you may sign the Adherence Letter using one of the options below.

If you have authority to adhere on behalf of all of your clients but do not wish to identify them on the Adherence Letter, you may do so by selecting “Investment/Asset Manager/or other agent on behalf of a fund/multiple funds/or other principal” from the dropdown under “Adherence Type” and naming the Investment/Asset Manager/Agent. Standard language “acting on behalf of the funds, accounts or other principals listed in the Covered Agreement between it (as agent) and another Adhering Party” will be provided for you.

If you do not have authority from all of your clients (or do have authority from all of your clients and wish to identify them), you can adhere on behalf of those clients whose permission you have by selecting “Investment/Asset Manager/or other agent on behalf of some but not all funds/or other principal it represents” and naming the Investment/Asset Manager/Agent. Standard language “acting on behalf of the funds, accounts or other principals listed in the appendix to this Adherence Letter in relation to the Covered Agreement between it (as agent) on behalf of such fund, account or other principal and another Adhering Party” will be provided for you. You must then list the fund name(s) by either naming each in the field provided (“Name of Fund”) or selecting “Add more than 10 funds” and downloading a list of these funds.

The appendix to your Adherence Letter can either name the clients, or identify them with a unique identifier which will be known and recognized by all other Adhering Parties with which the relevant clients have entered into transactions. The appendix to your letter will be posted on the ISDA website with your Adherence Letter listing the clients or, if you have more than ten clients, we will add a link to a document listing these clients.

If you are using the second method above, any transactions which you enter into on behalf of clients that are not listed in your Adherence Letter(s) will not be covered by the Protocol. If you wish to implement the changes contained in the Protocol in those transactions, then you and the relevant counterparty would need to enter into a bilateral agreement to amend those transactions to include those changes.

If (a) you do not have authority from any of your clients or (b) you have authority from some clients only but you are not able to disclose such clients whether by name or a unique identifier, you cannot adhere to the Protocol on behalf of any such clients. In this case, you will need to enter into a bilateral amendment agreement with each relevant counterparty listing the clients whose transactions with that counterparty will be amended by incorporating the amendments made by the Protocol.

If you wish to adhere on behalf of clients, you must ensure that you have the authority to do so from all clients on whose behalf you enter into transactions covered by the Protocol.

8. 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 Protocol and generated by the Protocol Management webpage.

9. Are there any costs to adhere to the Protocol?

Yes. Each party adhering to the Protocol must submit a one-time fee of U.S. $500 to ISDA at or before the submission of its Adherence Letter. Adhering Parties should review the Covered Agreement to identify the entity that signed the Covered Agreement, and the capacity in which such entity signed the Covered Agreement, to determine which entity submits the Adherence Letter. For example, if a parent company/agent has signed the Covered Agreement on behalf of all entities within the group, then only the parent company/agent needs to adhere. However, if each group entity has its own Covered Agreement in place which it has itself executed as principal, then each such entity would need to adhere.

Each individual legal entity is considered a separate Adhering Party for this purpose and would need to pay the adherence fee, except that an Investment/Asset Manager/Agent that adheres on behalf of one or more underlying funds or principals for whom it has entered into a Covered Agreement, using a single Adherence Letter, would only pay a single adherence fee for that Adherence Letter.

10. Can I revoke my participation in the Protocol?

No. Once an Adherence Letter has been accepted by ISDA, an Adhering Party is bound by all amendments with other parties that have adhered to the Protocol.

You can, however, bilaterally agree to amend any Covered Transaction(s) with your counterparty (the other Adhering Party) in accordance with paragraph 3(b) of the Protocol and any such subsequent amendments will supersede those made by the Protocol to the extent that they are inconsistent.