On 29 July 2020, the ISDA issued a statement on adherence to the IBOR Fallback Protocol.
Among other things the statement provides:
“As part of its work, ISDA will soon publish the IBOR Fallback Protocol to facilitate inclusion of the new fallbacks in existing non-cleared IBOR derivatives transactions between counterparties that both adhere to the protocol. Members of the ISDA Board of Directors strongly support broad adherence to the IBOR Fallback Protocol among all market participants globally that have non-cleared derivatives exposure to LIBOR and other IBORs.
“The fallbacks and related triggers that will be implemented in legacy non-cleared derivatives contracts via the IBOR Fallback Protocol are based on a series of open consultations over the past two years that resulted in broad market consensus. The IBOR Fallback Protocol is the most efficient way for participants in the vast majority of non-cleared derivatives markets to mitigate against the risks associated with the discontinuation of a key IBOR, and is a critical part of addressing both individual firm risks and systemic risks associated with the expected discontinuation and/or non-representativeness of LIBOR in particular. Central counterparties that clear derivatives referencing key IBORs have already stated they will use the powers in their respective rule books to implement the new fallbacks across all new and legacy over-the-counter transactions they clear.”