FIA and ISDA Publish Cleared Derivatives Addendum

FIA and ISDA announced the publication of the FIA-ISDA Cleared Derivatives Addendum, a template that can be used by U.S. FCMs and their customers to document their relationship with respect to OTC swaps. The Addendum includes representations for each party to make regarding certain clearing-related matters, such as the treatment of customer collateral. It also sets forth the close-out methodology for cleared OTC swaps, the triggers for liquidation and provisions for valuing the terminated trades.

Lofchie Comment: Any client seeking information as to the specific provisions of the Addendum, and wishing to understand the Addendum as compared to their preexisting futures and swap transactions, should contact their Cadwalader attorney.

View addendum in full here (links externally to ISDA website). Additional Materials: ISDA Press Release