Corporate Advisory

Institutions sign extendend ISDA Stay protocol

ISDA has announced the relaunch of the ISDA Resolution Stay Protocol to cover securities financing transactions (SFT). Twenty-one major global banks have signed the Protocol at launch

Major financial institutions have signed a revised ISDA Resolution Stay Protocol, which has been extended to cover securities-finance transactions. By adhering to the protocol, firms are opting to abide by certain overseas national resolution regimes, ensuring cross-border trades with adhering counterparties in those jurisdictions are subject to temporary stays.

The SFT Annex, developed with the assistance of the International Securities Lending Association (ISLA), expands the parameters of the original 2014 stay protocol to include securities financing transactions documented under master agreements sponsored by SIFMA, ICMA and ISLA.

The SFT Annex will enable adhering parties that use SIFMA-, ICMA- and ISLA-sponsored securities finance master agreements to comply with forthcoming regulations requiring the recognition of bank resolution stays in cross-border contractual arrangements.

Specifically, the SFT Annex opts adhering parties into certain existing and forthcoming special resolution regimes that provide for temporary stays on early termination rights in the event a bank counterparty enters into resolution.

A separate protocol is also being developed for other market participants, including the buy side, end-user firms and other banks, providing them with a tool to comply with forthcoming regulations requiring the inclusion of stays within financial contracts.