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ISDA Provides Additional FAQs on Potential "No Deal" Brexit

ISDA offered additional guidance on documentation for the OTC derivatives market in the event of a "no deal" Brexit.

ISDA stated that the earliest date on which a "no deal" Brexit could occur is October 31, 2019. However, Brexit could be delayed if (i) the UK government approves the withdrawal agreement and it is implemented in both the United Kingdom and the European Union, (ii) the United Kingdom proposes extending the two-year withdrawal period under certain provisions of the Treaty of the European Union ("TEU") and the European Council agrees to the extension, or (iii) the United Kingdom rescinds the provision under the TEU allowing for an extension.

The ISDA FAQs address:

  • new or modified obligations that entities will need to comply with upon exit day if they are "on-shored" into UK domestic law or subject to EU law, and changes that should be made to ISDA documentation in preparation; and
  • what effects a "no deal" Brexit will have on an entity's legacy ISDA Master Agreements.

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