The International Swaps and Derivatives Association has issued guidelines for derivatives activity in the U.S. on Friday when the exchanges will close to mark the funeral of former President Ronald Reagan. The guidelines state that Friday will not be a ‘Scheduled Business Day’ or an ‘Exchange Business Day’. This means exercise, valuation and expiration of transactions under the 1996 and 2002 ISDA equity derivative definitions will take place on the following Monday. Friday will not be considered a business day with reference to transactions under the 1993 commodity derivatives definitions.
On the fixed income side, options, rate resets and swaptions under the ISDA 2000 definitions will still go ahead, unless counterparties agree otherwise. It will also be business as usual for credit derivative transactions under the 2003 ISDA credit derivative definitions.
Payments and deliveries will not be affected by the bank holiday because the Fedwire and U.S. clearing and settlement houses remain open.
