On November 12, 2014, ISDA® announced that the 2014 Resolution Stay Protocol is open for adherence. The protocol was developed by an ISDA working group in coordination with the Financial Stability Board (FSB) to support the orderly cross-border resolution of global financial institutions in the event of a failure of one or more of these institutions (see Legal Update, ISDA: Major Banks Agree to Stay on Swap Agreement Termination Rights in Event of Failure). The protocol was signed by 18 major banks at launch, and is effective as of January 1, 2015 for those banks. The protocol is now open for adherence by any party.

Under the protocol, early termination rights under the ISDA Master Agreements of a failed institution are stayed for up to 48 hours after a bankruptcy filing or other equivalent domestic or overseas proceeding with respect to that institution. This is intended to give regulators time to facilitate an orderly resolution of a troubled bank. The protocol has met with some resistance from buy-side participants, including hedge funds, which have expressed reluctance to give up bargained-for early termination rights under their ISDA Master Agreements.

Adherence is voluntary, but regulators are working to develop new regulations to encourage further adoption of stay provisions. The bankruptcy component of the protocol will become effective in the US once relevant rules have been issued by US regulators.

ISDA's updated protocol webpage includes: