ISDA Equity MCA Protocol
The ISDA Equity MCA Protocol (the “Protocol”) is a tool for parties seeking to enter into Master Confirmation Agreements to document equity derivative transactions. The Protocol allows parties to submit an adherence letter and adopt a Master Confirmation Agreement with all counterparties who also submit an adherence letter AND with whom they had executed a side letter which governs other provisions which must be bilaterally determined. Documents covered under this Protocol are:
- Stand-alone 2007 Americas Master Variance Swap Confirmation Agreement, published by ISDA on January 30, 2007
- 2007 AEJ Master Variance Swap Confirmation Agreement, published by ISDA on February 12, 2007
- 2007 European Master Equity Confirmation Agreement, published by ISDA on May 10, 2007 and updated on September 17, 2007.
- Revised 2007 European Variance Swap Master Confirmation Agreement, published by ISDA on June 25, 2007
- 2006 Japan Master Variance Swap Confirmation Agreement, published by ISDA on January 22, 2007
The following documents must be submitted via email to the ISDA office in New York in order to adhere to the ISDA Equity MCA 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 firstname.lastname@example.org. 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 ISDA Equity MCA 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.
The Protocol will open for adherence on September 18, 2007.
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 ISDA Equity MCA 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 ISDA Equity MCA Protocol.
ISDA has prepared this brief summary of frequently asked questions to assist in your consideration of the ISDA Equity MCA 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?
The Protocol opens on September 18, 2007. There is no closing date.
How do I send in my Adherence Letter?
All Adherence Letters must be delivered by email to email@example.com. In the email, you must submit both your conformed and executed copies of the Adherence Letter.
The Adherence Letter(s) should be on your institution’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 institutional name, date and signature block.
You are not required to 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 institution.
What if I am an investment or asset manager – how do I complete the signature block?
If you are an investment or asset manager and act on behalf of multiple funds, you must indicate the following in the signature block: "Investment/Asset Manager, acting on behalf of the funds and accounts listed in the relevant Master Agreement between it and another Adhering Party". A separate Adherence Letter for each fund or account does not need to be submitted to ISDA. Further, no specific names of clients of the investment/asset manager will be publicly disclosed on the ISDA website in connection with the Protocol.
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 ISDA Equity MCA Protocol. You may obtain a copy of the form Adherence Letter by visiting the ISDA website, www.isda.org and clicking on "ISDA Equity MCA Protocol" and then clicking on "Form of Adherence Letter".
Limited Right of Revocation
Can I revoke my participation in ISDA Equity MCA Protocol?
Once an Adherence Letter has been accepted by ISDA, an Adhering Party is bound by its agreement to enter into an MCA with other parties that have already adhered to the Protocol or, subject to the discussion below, that adhere before a designation of the Annual Revocation Date.
An Adhering Party may, at any time during the period from January 1 to January 31 of a calendar year, deliver to ISDA a notice specifying the next Annual Revocation Date as its cut-off date in respect offer to amend with future Adhering Parties. The effect of such a letter will be to withdraw adherence for future Adhering Parties as of February 15 in that calendar year (agreements already made with other parties that have adhered prior to this date will not be revoked). This right does not impact any rights or obligations that may be contained in an underlying Master Confirmation Agreement.
What is the “Side Letter Condition” and how does it work?
Each of the ISDA published Master Confirmation Agreements referred to in the Protocol contains certain provisions that must be bilaterally negotiated before the Master Confirmation Agreement can be completed. Parties in addition may choose to agree to additional provisions that they wish to insert in their side letters. ISDA has provided sample side letters for all Master Confirmation Agreements that are covered under the Protocol. The Side Letter Condition states that your agreement to enter into a Master Confirmation Agreement with another Adhering Party is only effective on the date that your side letter with respect to that Master Confirmation Agreement is completed with that other Adhering Party. Please note that different Master Confirmation Agreements may have different Implementation Dates depending on the date on which you complete a Side Letter with your counterparty.
Does it cost any money to adhere to the Protocol?