ISDA Announces Upcoming Launch of IBOR Fallbacks Protocol

The International Swaps and Derivatives Association has announced that it will launch its IBOR Fallbacks Supplement to the 2006 ISDA Definitions and its 2020 IBOR Fallbacks Protocol on October 23, 2020, although they will not take effect until January 25, 2021. The Supplement and Protocol implement fallbacks for derivatives contracts that reference discontinued or non-representative IBORs.

ISDA had been awaiting approvals for its fallbacks plans from various international competition authorities, including the U.S. Department of Justice. On October 1, 2020, the DOJ sent a business review letter confirming that it did not intend to challenge ISDA's proposals. ISDA does not anticipate adverse action by any other competition authorities.

From January 25, 2021, when the new fallbacks take effect, all new derivative contracts that incorporate the 2006 ISDA Definitions and reference a covered IBOR will contain the fallbacks. Parties to existing derivative contracts will also be able to incorporate the new fallbacks by mutually adhering to the protocol or bilaterally agreeing to include the new fallbacks.

ISDA had previously written to the Co-Chairs of the Financial Stability Board Official Sector Steering Group seeking input on the proposed timing for the launch of ISDA's fallback plans. The FSB has now published a press release encouraging widespread and early adherence to the Protocol.

View ISDA's press release on the launch of the IBOR Fallbacks Protocol and Supplement.

View the US Department of Justice's business review letter.

View details of ISDA's letter to the FSB.

View FSB's press release on adoption of ISDA's Protocol.

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