ISDA had intended to publish a supplement to the 2006 ISDA Definitions such that new transactions incorporating them would include fallbacks for LIBOR cessation (the Supplement), and a protocol to facilitate amendments to legacy derivate contracts (the Protocol) (for more information, see our earlier blog post). ISDA initially expected publication of the supplement and protocol to occur in the coming months. However, on September 21, 2020 they published a letter in which the Protocol and Supplement timeline was updated.

ISDA advised that the launch of the Protocol and Supplement is dependent on:

  • ISDA receiving a positive business review letter from the U.S. Department of Justice (DoJ); and
  • ISDA disclosing the DoJ’s letter to competition authorities in other jurisdictions and receiving positive feedback from their counsel in those jurisdictions (which include the European Union, Australia and Canada).

ISDA advise that whilst they cannot predict how long such feedback will take, they hope that it will only take 1-2 weeks. Following this, ISDA will provide market participants with two weeks’ notice of the official launch date and effective date to enable them to adhere to the Protocol ‘in escrow’ (as discussed in our earlier blog post). Finally, the Protocol and Supplement will take effect around three months following the launch date.

Due to this timeline, and feedback from market participants that the effective date should not occur in December, ISDA advise that the effective date will not occur before the second half of January 2021.

Please contact any of the authors of this article or your regular McGuireWoods contact if you have questions about, or would like assistance with, the LIBOR transition.