The two upcoming dates to be aware of:
- 4 Oct: 2021 ISDA Definitions implementation date – from this date market participants can start to use the 2021 ISDA Definitions, and ISDA have stated they will no longer apply any amendments to the old 2006 Definitions
- 27 Nov: MarkitWire change defaults on their user interface to use 2021 Definitions on new trades by default. Between 4 Oct and 27 Nov it will be possible to use 2021 Definitions but you have to actively elect to when booking a trade
The 4 October date is when 2021 Definitions can start to be used, though that is not to say everyone will start using them from them. We expect most market participants will continue to support 2006 Definitions as well, and ISDA has been at pains to explain that they expect there to be a gradual shift to using the new definitions over time.
There is no hard date published (as yet) on when (if) 2006 Definitions would cease to be permissible in messages, though ISDA did put out a press release this week encouraging people to move as soon as possible.
The clearing houses (with exception of Japan Securities Clearing Corporation (JSCC) who are waiting until 6 Dec) have all stated they will support clearing of swaps under the 2021 definitions from 4 October, however they will also continue to clear swaps under the old definitions as well. See LCH presentation for an explanation of their approach.
Worth noting however that the various upcoming activities at CCPs for LIBOR transition, starting with the basis swap splitting on weekend 2-3 Oct, will be confirmed only under the new 2021 definitions. So, all market participants involved in those activities must at least support the FRO name changes from 4 Oct in order to participate in these events.