The International Swaps and Derivatives Association, Inc. ("ISDA") has been at the forefront of benchmark reforms having published the fallbacks for certain key Inter-Bank Offered Rates by way of (a) the ISDA 2020 IBOR Fallbacks Protocol (incorporating fallbacks into legacy trades); and (b) Supplement number 70 to the ISDA 2006 Definitions (providing fallbacks for new transactions).
In furtherance to its efforts, ISDA has now published a new set of fallbacks for derivatives referenced to certain previously uncovered benchmark rates including the Indian rupee Mumbai Inter-Bank Forward Outright Rate ("MIFOR"). In this regard ISDA has published the following:
1. ISDA 2021 Fallbacks Protocol ("Protocol") and the December 2021 Benchmark Module ("Module"); and
2. Supplement number 90 to the 2006 ISDA Definitions ("Supplement").
The Protocol published is structured as a modular protocol comprising boilerplate provisions with the modules containing the actual fallbacks covering different benchmark rates. The Module is the first of the additional modules that ISDA may release going forward and it contains fallbacks for MIFOR along with certain other benchmark rates. Adherence to the Module (along with the Protocol) is intended to incorporate the fallbacks provided into legacy trades.
The Supplement on the other hand amends the ISDA 2006 Definitions to introduce fallbacks to these rates. Additionally, 2021 ISDA Interest Rate Derivatives Definitions also stand amended to that effect.
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