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ISDA applies further French twist to IM documentation

Last July, ISDA decided to add French and Irish law to our library of Master Agreements in an attempt to prepare for potential Brexit complications. As mentioned in our earlier post, the objective of this is not to undermine English and New York law, but merely to offer an alternative so firms are awarded a greater choice. ISDA has recently extended this option by providing French law Collateral Documents for use with a Bank Custodian, in order to allow full Francophile IM compliance.

These documents essentially mirror the terms of the ISDA 2019 Collateral Transfer Agreement for IM, except:

  1. They apply the additional provisions for a French law governed CTA. This could be beneficial for French counterparties as they are able to retain French law, as well as have access to a more comprehensive French ISDA Master Agreement.
  2. They are provided as dual English and French Language versions. This will increase their accessibility and make them more attractive to parties that have not considered the French system before.
  3. They include a clause allowing an election as to which language version will apply.

The eventual utility of this alternative is still unknown, but it does demonstrate ISDA’s commitment to delivering a Brexit-borne alternative.

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