ISDA asked its members about the use of the daily counting group provisions in the 2000 definitions to ensure that the 2006 definitions are consistent with current market practices. In response to the reactions to that survey, ISDA replaced the terms “Actual/365”, “Act/365” and “A/365” with “Actual/Act/Act (ISDA)”, “Act/Act” and “Act/Act (ISDA), with the survey suggesting that the former terms were rarely used in current market practice and had been replaced by the latter. The definition of the content of these terms has not been changed in the 2006 definitions. ISDA has created a wide range of materials for the framework contract, including definitions and user manuals. This documentation is intended to avoid disputes and to facilitate the uniform use and interpretation of the framework contract. These materials are produced by ISDA and regularly updated to reflect the latest regulatory or market changes. Notwithstanding the above, market participants should consider moving to the new definitions. In recent times, we have seen an increasing number of transactions and new ISDA framework contracts, with the 2006 definitions, and it is likely that this trend will continue beyond the date of “Go Live”. It is inevitable that these definitions will eventually replace those of 2000 if, for no reason other than ISDA, the 2000 definitions are no longer updated to reflect new sources of interest rates, interest rates or currencies.
While some changes in the 2006 definitions may not be significant for the transactions of most market participants, the overall impact could be significant, given that the definitions relate to transactions representing the vast majority of the $500 trillion derivatives market and that their implementation requires changes in calculation systems, tracking and processing of derivative payments. The International Swaps and Derivatives Association (ISDA) announced today that it has published new and revised definitions of interest rate and currency derivatives. The 2006 isda definitions, which follow the widely used isDA 2000 definitions, provide standard references for interest rate and currency swap operations, documented under a GDR framework agreement. . . .