In 2021, ISDA published a new set of Interest Rate Derivates Definitions (the “2021 Definitions”), replacing the 2006 ISDA Interest Rate Derivatives Definitions (the “2006 Definitions”), which by then had required around 90 supplements, or 600 pages of amendments, to reflect changes in regulations, technology, and market practice.
The 2006 Definitions have routinely been incorporated into equity swap trading documentation to document the calculation of the floating, or interest, amount payable by one party to the other.
To promote uptake of the 2021 Definitions in the equity derivatives market, in 2023, ISDA released the ISDA 2023 Equity Swap – 2021 Definitions Protocol (the “Protocol”). The Protocol enables adhering parties to incorporate the 2021 Definitions into their equity swap master confirmation agreements in place of the 2006 Definitions, with the aim of facilitating a synchronized transition to the newer set of definitions across the industry.
UBS has adhered to the Protocol on behalf of UBS AG (LEI: BFM8T61CT2L1QCEMIK50) and UBS Europe SE (LEI: 5299007QVIQ7IO64NX37).
How and when to adhere to the Protocol
The Protocol adherence window is open now, and we encourage all clients that trade equity swaps with UBS AG or UBS Europe SE under a master confirmation agreement to adhere to the Protocol at their earliest opportunity.
You can adhere to the Protocol via the ISDA website as a single entity and/or as an agent, for any underlying legal entities on behalf of which you are documented to trade equity swaps. Where you plan to adhere on behalf of certain underlying legal entities only, you should note that there are additional steps required to disclose details of the entities on whose behalf you are adhering through the ISDA Amend tool. For more information, please refer to the ISDA Equity Swaps FAQ which you can find on the ISDA website.
The Protocol changes will take effect as of 18th March 2024 for clients adhering to the Protocol before that date (or as of the date of their adherence for clients adhering after that date).