As part of its ongoing protocol project, the International Swaps and Derivatives Association (ISDA) has announced the launch of the August 2012 Dodd-Frank Protocol. The Dodd-Frank Protocol is designed to allow swap market participants to simultaneously amend multiple ISDA Master Agreements for the purpose of facilitating compliance with Dodd-Frank regulatory requirements, such as External Business Conduct Rules and others as they are finalized. It consists of a series of amendments to existing documentation, as well as standardized questionnaires that must be completed by counterparties to satisfy new regulations. ISDA has also announced that they plan to launch future protocols to simplify documentation changes for upcoming CFTC and SEC final rules, as well as changes under EMIR, MiFiD and MiFIR.
The Dodd-Frank Protocol is intended to help swap dealers to address a host of now finalized CFTC and SEC rules, including:
- External Business Conduct Standards for Swap Dealers and Major Swap Participants
- Large Trader Reporting for Physical Commodity Swaps
- Position Limits for Futures and Swaps
- Real-Time Public Reporting of Swap Transaction Data
- Swap Data Recordkeeping and Reporting Requirements
- Swap Dealer and Major Swap Participant Recordkeeping, Reporting and Duties Rules
- Futures Commission Merchant and Introducing Broker Conflicts of Interest Rules, and Chief Compliance Officer Rules for Swap Dealers, Major Swap Participants, and Futures Commission Merchants
- Swap Data Recordkeeping and Reporting Requirements: Pre-Enactment and Transition Swaps
ISDA sees their protocol process as an effective way to eliminate the necessity for costly and time-consuming bilateral negotiations. That being said, “it cannot address all situations, products or types of counterparties” and ISDA recommends that counterparties obtain legal advice as to whether the provisions of the Protocol address their particular situations. The Protocol is open to ISDA members and non-members. Parties will pay a one-time fee of $500 to ISDA to adhere to the Protocol.