ISDA Collateral Settlement Timing Protocol
The ISDA Collateral Settlement Timing Protocol the ("Protocol") offers market participants an efficient way to to shorten the transfer timing in CSAs (NY CSA, UK Annex, Japanese Annex (1995 and 2008 versions)) from T+3* to T+2 following the reform to shorten the settlement timing for Japanese government bonds.
The ISDA Collateral Settlement Timing Protocol is open to ISDA members and non-members. There is no cut off date for adherence. ISDA reserves the right to designate a closing date of this protocol by giving 60 days notice on this site.
The following documents must be submitted via email to the ISDA office in New York in order to adhere to the ISDA COLLATERAL SETTLEMENT TIMING PROTOCOL (the "Protocol"):
- One signed copy of the Adherence Letter, providing information on the contact person at the Adhering Party.
- One conformed copy of the Adherence Letter. A conformed copy is an exact copy of the signed letter with the name of the person signing the letter typed on the signature line. A signature should not appear on the conformed copy of the letter.
ISDA will only accept email delivery of Adherence Letters. An Adhering Party is not required to send original Adherence Letters to the ISDA offices.
Please submit all Adherence Letters via email to email@example.com. It is critical that both a scanned, signed Adherence Letter, as well as a scanned, conformed Adherence Letter is submitted. Entities will not be deemed to have adhered to the Protocol until both the signed and conformed Adherence Letters are submitted by email in accordance with the Adherence Period.
No other documents are required in order to adhere to the Protocol. Supporting documentation, such as board resolutions or a list of authorized signatures, can be provided and will be held in safekeeping by ISDA, but it is not necessary to submit such documents in order to adhere to the Protocol. Access to supporting documentation will only be provided if requested in writing.
Email address for Delivery of Adherence Letters:
Policy Regarding Conformed Copies
A signed copy and a conformed copy of an Adherence Letter must be received in order for ISDA to list a party as having adhered to the Protocol.
The most common problem experienced in the adherence process for prior Protocols was the failure to include a conformed copy of the Adherence Letter. We remind parties that a conformed copy, together with a signed copy, must be submitted to ISDA in connection with adherence to the Protocol.
ISDA has prepared this brief summary of frequently asked questions to assist in your consideration of the ISDA Collateral Settlement Timing 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?
There is no cut off date for adherence. ISDA reserves the right to designate a closing date of this protocol by giving 60 days notice on this site.
How do I send in my Adherence Letter?
All Adherence Letters must be delivered by email to firstname.lastname@example.org. In the email, you must submit both your conformed and executed copies of the Adherence Letter.
You must use the form of letter for the ISDA Collateral Settlement Timing available on the ISDA website. Click here for form of adherence letter.
The Adherence Letter(s) should be on your firm'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 firm name, date and signature block.
Please do not 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 firm.
SPECIAL CONSIDERATIONS FOR INVESTMENT/ASSET MANAGERS
What if I am an investment or asset manager, not all of my discretionary management agreements permit me to amend my client's agreements?
If you are an investment or asset manager and act on behalf of multiple funds, you have the following options:
- If you have authority to adhere on behalf of all of your clients you may do so by indicating the following in the signature block:"Investment/Asset Manager, acting on behalf of the funds and accounts listed in the relevant Agreement (or other agreement which deems an Agreement to have been created) between it (as agent) and another Adhering Party [and acting on behalf of the funds and accounts listed in the exhibit to this Adherence Letter in relation to the relevant Agreement (or other agreement which deems an Agreement to have been created) between such fund or account and another Adhering Party]".If you wish to adhere in this way, you must ensure that you have the authority to do so from all clients on whose behalf you enter into credit derivative transactions covered by the Protocol.
- If you do not have authority from all of your funds, you can adhere on behalf of those funds whose permission you have by indicating the following in the signature block "Investment/Asset Manager, acting on behalf of the funds and accounts identified in [the] attachment  to this Adherence Letter in relation to the relevant Agreement (or other agreement which deems an Agreement to have been created) between it (as agent) and another Adhering Party [and [acting on behalf of the funds and accounts identified in attachment 2 to this Adherence Letter] in relation to the relevant Agreement (or other agreement which deems an Agreement to have been created) between such fund or account and another Adhering Party]". The attachment to your Adherence Letter can either name the clients or funds, or identify them with a unique identifier which will be known and recognized by all other Adhering Parties with which the relevant funds or clients have entered into Protocol Covered Transactions. The attachment to your letter will be posted on the ISDA website with your Adherence Letter.Any credit derivative transactions which you enter into on behalf of funds that are not listed in your adherence letter(s) will not be covered by the Protocol and you and the relevant counterparty will have to enter into a bilateral amendment agreement as discussed in 3 below if you wish to implement the changes.
- To the extent that you do not have authority from all of your funds and you are not able to disclose your clients whether by name or a unique identifier, you cannot adhere to the Protocol on behalf of any fund that you cannot identify. Your option in these circumstances is to enter into bilateral amendment agreements with each relevant counterparty listing the funds who's whose Transaction(s) with that counterparty will be amended by incorporating the amendments made by the Protocol.
- To the extent that you add a fund to an umbrella master agreement after the Implementation Date of the Protocol (whether such a client was an existing client on or a client acquired after the Implementation Date) that client would not be covered by your adherence to the Protocol and any CDS transactions you enter into on behalf of that client would not be Protocol Covered Transactions. Your option in these circumstances is to bilaterally agree that the Protocol should be incorporated into all CDS transactions that would otherwise be Protocol Covered Transactions (had the fund adhered to the protocol). This could be done when you add the client to the umbrella master agreement.
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.
Does it cost any money to adhere to the Protocol?
DETAILS RELATING TO THE PROTOCOL
What does the Protocol do?
The goal of the Protocol is to shorten the transfer timing in CSAs (NY CSA, UK Annex, Japanese Annex (1995 and 2008 versions)) from T+3 or longer to T+2 following the reform to shorten the settlement timing for Japanese government bonds. If the existing transfer timing is shorter than T+2, such as T+1, the transfer timing will not be extended and remain as T+1.
Eligible collateral covered by the Protocol are Japanese government bonds, US Treasury and cash (all currencies). Therefore, the transfer timing of securities other than Japanese government bonds and US Treasury will not be shortened by the adherence to the Protocol.
Please refer to Explanatory Memorandum for Collateral Settlement Timing Protocol for further information.