ISDA has circulated a pre-publication draft of an amendment agreement, designed to help counterparties to ISDA Master Agreements comply with the EMIR regulatory technical standards regarding risk mitigation techniques(the “Risk Mitigation RTS”), which deals with the issue of timely confirmations of non-cleared OTC derivatives.
The template amendment agreement is a very helpful document which brings into focus the issues which counterparties will need to consider in this area. It enables parties to specify responsibilities for the production and agreement of confirmations, facilitates both positive and negative affirmation of confirmations and suggests alternative wording depending on whether breaches should constitute Events of Default, Termination Events or have other consequences.
The document is currently in pre-publication form only, but hopefully will be finalised in late February/early March. Unfortunately, given that the Risk Mitigation RTS seems likely to come into force in mid-March, this won’t give market participants must time in order to comply. As such, it would be wise to be thinking about these issues now.Contact Us