ISDA published a derivatiViews commentary by Chief Executive Officer Scott O’Malia arguing that the faster pace of recent financial institution failures requires OTC derivatives counterparties to be able to terminate and value trades quickly, and to have established close-out playbooks rather than relying on ad hoc responses. The commentary highlights that close-outs have become more operationally complex alongside bank resolution regimes that impose temporary stays on termination rights and margin requirements for non-cleared derivatives that set strict collateral segregation rules. ISDA pointed to its close-out framework and a series of close-out seminars held in London, New York, Singapore and Sydney, with 257 attendees including market participants and public sector representatives. It also flagged practical difficulties in serving termination notices when contractual delivery details are outdated or physical delivery is disrupted, noting that even short delays can materially increase exposures and costs; as a response, ISDA referenced the ISDA Notices Hub launched earlier in 2025 and reported adherence by more than 145 buy- and sell-side entities, including 65% of global primary dealers, via the ISDA 2025 Notices Hub Protocol. ISDA plans to run a virtual series of close-out seminars in 2026, with further details to be published on its events page.
ISDA 2025-12-03
ISDA reports 145 entities have adhered to its 2025 Notices Hub Protocol to speed delivery of derivatives termination notices
ISDA CEO Scott O’Malia stressed the need for OTC derivatives counterparties to swiftly terminate and value trades amid recent financial institution failures, advocating for established close-out playbooks. He also addressed operational complexities in close-outs due to bank resolution regimes and margin requirements, highlighting ISDA's close-out framework, seminars, and the ISDA Notices Hub, which has adherence from over 145 entities, including 65% of global primary dealers.