ISDA Notices Hub

What is the Notices Hub?

It is an online platform being developed by ISDA, to assist with the delivery and receipt of Section 5 and Section 6 notices under the ISDA Master Agreement.

It will provide parties with an alternative method of serving notices.

What are section 5 and section 6 notices? How are they delivered?

Section 5 notices are used to formally notify a counterparty of Events of Default or Termination Events which have occurred under the ISDA Master Agreement.

Section 6 notices are used to notify a counterparty that an ISDA Master Agreement is to be terminated early.

As per section 12 of the ISDA Master Agreement, these notices are typically to be delivered by post, courier or fax.

Following the case of Greenclose Ltd v NatWest Bank plc, an amendment to the method of delivery requires formal variation of Section 12 of the ISDA Master Agreement.

In this case, NatWest attempted to terminate a swap via email (which was not expressly permitted under Section 12 of the 1992 ISDA Master Agreement), and the court held it was not a valid notice for the purpose of the 1992 ISDA Master Agreement.

Why is it being implemented?

The proposal was initially developed in response to difficulties experienced during the COVID Pandemic and following the imposition of sanctions in Russia.

Specifically, the proposal is designed to address problems such as:

Outdated or incorrect party notice details (i.e outdated email addresses and physical postal addresses)
Post office delays
Limited office and location access for delivery by post/courier

Deemed delivery using the platform

A notice will be deemed to be delivered as soon as it is accessible to the counterparty on the platform.

The date and time of delivery will be recorded on the notice.

Parties may elect how they would like to be notified of delivery (i.e by post, email, SMS or other means).

Parties may still specify when the actual delivery date is in their ISDA Agreement. For example, if a notice is deemed to be delivered on the platform at 9pm (out of business hours), it can still be agreed for the actual delivery date to be the next working day.

Will I automatically be able to use this platform for existing ISDA Agreements?

No, parties to existing ISDA agreements will need to agree to vary section 12 of their ISDA Agreement, to allow for notices to be delivered via the platform.

Each party will also need to complete an onboarding process to access the platform, and match with their counterparty on the platform.

In terms of fees payable for use of the platform, ISDA has confirmed that:

The platform will be free for buyside and end users
There will be different annual fees payable for the following categories of dealer (i.e financial institutions such as banks): Global ($50,000), International ($35,000), Regional ($15,000) and Emerging ($10,000).
Notwithstanding the annual fees above, there will be a discounted rate in the first two years for early adopting dealers

The final costs model for the ISDA Notices Hub can be found here.