Isda's Euro Protocol draws 242 signatories

The International Swaps and Derivatives Association (Isda) said this week that 242 dealers and end-users signed its 2001 Euro Protocol by the November 30 deadline. Isda issued the Euro Protocol in September in response to documentation concerns voiced by Isda member firms relating to the final transition to the euro currency.

The Euro Protocol allows derivatives users, such as banks, corporations and governments, to automatically update documents for outstanding derivative transactions with other signatories, without having to approach every individual counterparty. The four areas that can be amended cover payments and rate fixings, re-denomination of notional amounts, accounts for payments, and payment netting.

Signing up to the protocol will simplify the process of amending derivative contracts, cutting down on time and expense involved in contractual negotiations, said Isda. This will enable firms to overcome some of the issues caused by the final elimination of the 12 European legacy currencies on January 1, 2002.

The list of 242 firms includes major investment banks such as JP Morgan Chase, Goldman Sachs and Deutsche Bank, as well as government banks such as the National Bank of Greece and the Bank of Ireland.

Payment and rate fixing will take effect from December 17, while the other protocol annexes will be effective from January 1 next year.