ISDA launches collateral agreement protocol

By Beth Shah
13 May 2014

The International Swaps and Derivatives Association has launched the ISDA 2014 Collateral Agreement Negative Interest Protocol, designed to provide certainty about how the payment of interest on posted collateral is calculated in a negative interest rate environment under ISDA collateral documentation.

According to ISDA, the protocol enables parties to amend the terms of certain ISDA-published collateral agreements to account for negative interest amounts on cash collateral. The party pledging the cash collateral would pay interest to the collateral receiver in a negative rate environment, by paying the absolute value ...

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