ISDA and FIA Europe Publish European Cleared Derivatives Execution Agreement

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The International Swaps and Derivatives Association, Inc. (ISDA) and FIA Europe today jointly announced the publication of the ISDA/FIA Europe Cleared Derivatives Execution Agreement for principal-to-principal (European model) client clearing. The Agreement was developed with the assistance of a working group of both buy- and sell-side institutions in the European cleared over-the-counter (OTC) derivatives markets.

As per ISDA's EMIR site, the non-US, English law Cleared Derivatives Execution Agreement is a template for use by market participants in negotiating execution-related agreements with counterparties to swaps that are intended to be cleared. The document is intended to facilitate the entry into of derivatives transactions and the clearing of such transactions with one or more CCPs located outside of the US and can be used in conjunction with the ISDA/FOA Client Clearing Addendum.

The Agreement sets out the rights and obligations of each counterparty to a trade that is intended to clear. It describes the process for submitting a trade to a clearing house, as well as the fallback provisions should a transaction not be accepted for clearing. Parties may use this agreement and amend it as necessary to reflect their own circumstances.

Simon Puleston Jones, CEO of FIA Europe, added: “This agreement represents the latest successful step forward by the industry in the risk management of its cleared swaps business. It stands as a testament to what can be achieved through the collaborative efforts of the members of FIA Europe and ISDA to further standardise documentation across the market, for the mutual benefit of both sell- and buy-side participants.”

Maria L.

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