On February 5, the International Swaps and Derivatives Association (“ISDA“) announced that it will seek additional information from market participants about the development of contractual language that can be used to replace references to LIBOR and other interbank offered rates in swaps and other the over-the-counter (“OTC“) derivative contracts. ISDA refers to this replacement contractual language as “fallback language”.
On February 6, ISDA provided an updated timeline that relates to the development and implementation of this fallback language. Also, ISDA confirmed that buy-side firms will not be charged a fee, if they adhere to the final fallback protocol within three months of its publication.
This post will provide additional information about these two developments.