How does the ISDA EMU Protocol work?
The Protocol reflects an innovative procedure which allows for the amendment of ISDA Master Agreements in light of the introduction of the Euro. It builds on the simple principle that parties to such agreements may make an offer to one or more of their counterparties to amend any outstanding agreements that are affected by EMU. A bank, corporation or other derivative user would indicate its participation in the Protocol arrangement by sending an adherence letter (a signed original, together with a conformed copy) to ISDA’s office in London or New York. This allows the firm to specify which of five standardised amendments it wishes to make with other Protocol adherents. By submitting the adherence letter, the firm agrees that each outstanding Master Agreement is amended in all areas where an election made in its adherence letter matches that made in an adherence letter submitted by one of its counterparties. The amendment and adherence process, among other matters, is set out in the Pro
