FinReg + Policy Watch
March 25, 2021

ISDA Publishes Dodd-Frank Security-Based Swap Protocol

On March 15, 2021, ISDA published the ISDA 2021 Security-Based Swaps (SBS) Top-Up Protocol (the SBS Top-Up Protocol).  The SBS Top-Up Protocol enables SBS dealers (SBSDs) and other market participants to comply with certain SBS rules implemented by the SEC under Title VII of the Dodd–Frank Wall Street Reform and Consumer Protection Act.

The SBS Top-Up Protocol is based on the ISDA August 2012 DF Protocol, which helps firms implement the CFTC Dodd-Frank external business conduct rules, and the ISDA March DF 2013 Protocol, which helps implement the CFTC Dodd-Frank swap documentation rules.  Firms that trade CFTC regulated swaps with provisionally registered CFTC swap dealers will likely have already adhered to the August 2012 Protocol and March 2013 Protocol.  The SBS Top-Up Protocol facilitates compliance by SBSDs with the SEC’s SBS rules by enabling market participants to amend or “top up” the swap trading agreements and disclosures already made pursuant to the August 2012 Protocol and March 2013 Protocol to address the SEC’s SBS rules.

Similar to the Dodd-Frank rules covered in the August 2012 Protocol and March 2013 Protocol, the SBS Top-Up Protocol covers a variety of SEC SBS rules, including reporting and dissemination of SBS information, business conduct standards for SBSDs, trade acknowledgement, risk mitigation techniques and the cross-border application of certain SBS requirements. The first deadline for registration by SBSDs under the SEC SBS rules is November 1, 2021.

To the extent that a market participant has not already adhered to the August 2012 Protocol or March 2013 Protocol with a swap dealer, ISDA will also publish a separate protocol that will allow entities to comply with the SEC’s SBS rules. ISDA plans to launch this second SBS protocol later in 2021.

Additionally, on January 15, 2021, ISDA published a U.S. Self-Disclosure Letter that facilitates the exchange of information between market participants to determine whether compliance with certain SBS rules is required.  In the ISDA U.S. Self-Disclosure Letter, market participants can exchange information necessary to determine whether the entity must comply with CFTC and/or U.S. banking agency swap regulations and/or SEC SBS regulations, including if their trading relationship may be subject to applicable CFTC, banking, or SEC regulatory margin requirements for uncleared swaps and/or SBSs.

As with previous Dodd-Frank protocols, market participants can adhere to the 2021 SBS Protocol or the U.S. Self-Disclosure Letter by going to the ISDA website at and entering the required information online or by signing a bilateral equivalent agreement with an SBSD.

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