The ISDA Notices Hub: an important step forward to facilitate delivery of critical notices

What are the key features of the ISDA Notices Hub?

Address Updates

Through the ISDA Notices Hub users can maintain and update their Notice Details for all of their Matched Counterparties (as defined below) via a single-entry process. The Notice Details cover the full range of notices and other communications under the ISDA Master Agreement, not just termination-related notices pursuant to Section 5 and Section 6. This will facilitate parties updating their notice details from time to time, as often parties may enter into an ISDA Master Agreement and then forget to keep their details up to date, leading to absurd situations where counterparties have had to deliver (or attempt to deliver) notices both to the known up-to-date address and the address specified in the agreement even if parties know that it no longer exists or is no longer used.

Notice Delivery

Certain events in the last few years have highlighted the difficulty of not just delivering notices, but also delivering them promptly¹. ISDA calculates that even a small delay in the delivery of a termination notice – for example, from Friday afternoon until Monday morning – could result in a loss of $1 million for a medium-sized derivatives portfolio². An added functionality of the ISDA Notices Hub is to allow instantaneous delivery and receipt of critical termination-related notices. It is worth noting, though, that the ISDA Notices Hub will act as an additional option for delivering notices and users will remain free to deliver these types of notice by other agreed means.

Subject to the terms in each relevant agreement regarding delayed effectiveness for delivery on non-business days, notices sent via the ISDA Notices Hub will be deemed effective once they are “made available” to the recipient, which is determined by a definitive time and date stamp shown in the “Delivered” column on the platform. Although recipients of notices will be able to pre-fill an ‘escalation tree’ of individuals and groups (such as legal) that should be alerted to the fact that a notice has been received by their institution via the platform, firms need to be aware of the importance of regularly checking general email addresses set out for these purposes, as it is not necessary for recipients to have actually accessed the notice for that notice to be effective.

How do market participants use the ISDA Notices Hub to amend their documentation?

In order to adopt the ISDA Notices Hub and reap the benefits, market participants need to take a two-step approach: (1) amend the terms of the relevant agreement (either bilaterally or by adhering to the Protocol) to incorporate the ISDA Notices Hub as a permitted notice delivery and/or address update mechanism, and (2) “match” with relevant counterparties on the platform. 

“Matching”

The “matching” process takes place on the ISDA Notices Hub itself. Following account creation on the platform, a user will be able to send invitations (“Match Invitations”) on the ISDA Notices Hub to its counterparties (so long as such counterparties are also adhering parties). The Match Invitation will specify the relevant Notices Hub Module (as defined below) to which the Match Invitation applies. Parties can choose which Notices Hub Modules they wish to match in respect of and may agree off-platform which (if any) Protocol Covered Documents (as defined below) shall be excluded from the scope of the Match Invitation. Once a Match Invitation has been accepted, the parties will become “matched” (“Matched Counterparties”) in respect of the relevant Protocol Covered Documents.

What is the Protocol and how can market participants utilise it?

What does the Protocol do and how does the Protocol work?

To incentivise widespread adoption of the ISDA Notices Hub, the Protocol has been developed to enable market participants to add the ISDA Notices Hub as a permitted notice delivery and/or address update mechanism in existing ISDA Master Agreements. The Protocol is a modular protocol which contains: (i) individual modules (“Notices Hub Modules”) which will be published by ISDA periodically containing amendments to Protocol Covered Documents (as defined below) and (ii) boilerplate provisions that outline the ways that market participants can adhere to the Protocol and subsequently make the amendments specified in individual Notices Hub Modules. It is important to note that adherence to the Protocol in and of itself does not result in any amendments outlined in a Notices Hub Module being made. 

Notices Hub Modules

A Notices Hub Module is a standard set of amendments or supplements to certain Protocol Covered Documents (as defined below) identified therein and will typically be published to reflect a new functionality available on the ISDA Notices Hub. The Protocol only requires a single up-front adherence and then users can adopt each new piece of functionality outlined in a new Notices Hub Module by “matching” with their counterparties in respect of that Notices Hub Module on the ISDA Notices Hub (as described above). 

Protocol Covered Documents

The documents that can be amended in accordance with the Protocol (“Protocol Covered Documents”) will vary on a module-by-module basis. ISDA has deliberately drafted the concept of Protocol Covered Document broadly so that it covers a very wide range of potential documents and contemplates future Notices Hub Modules amending other documentation (such as non-ISDA published master agreements). 

On the go-live date in July 2025, the only available Notices Hub Module is the Notices Hub Module #1 (“Notices Hub Module 1”), in relation to which the Protocol Covered Documents are the 1992 and 2002 ISDA Master Agreements (including the French and Irish law ISDA 2002 Master Agreements and those entered into by way of long-form confirmation).

Notices Hub Module 1

The Notices Hub Module 1 contemplates two different levels of functionality that market participants may agree to:

1. Address Only which means that the adhering party agrees to use the ISDA Notices Hub to update their Notice Details, but not for the delivery of notices (the base level of functionality); and 
2. Full Functionality which means that the adhering party agrees to use the ISDA Notices Hub to update their Notice Details and the ability to use the ISDA Notices Hub to deliver and receive Covered Notices (as defined below).

Parties will select their “functionality election” when they set-up their account on the platform and may only make a single choice (a user cannot customise its functionality election on a counterparty-to-counterparty basis). 

When two users “match” on the platform in relation to Notices Hub Module 1, the agreed functionality will always be the lesser of the two functionality elections made by the Matched Counterparties (that is if one Matched Counterparty has elected for Address Only functionality, irrespective of whether the other Matched Counterparty has elected for Full Functionality, the agreed level of functionality between the parties will always be Address Only and neither party may send any notice or other communication under Section 5 or Section 6 or any related notice of set-off, reservation of rights or waiver (each a “Covered Notice”) via the ISDA Notices Hub). Matched Counterparties can agree in the future to enhance their originally agreed level of functionality, however, such enhancement is only permitted in an upwards direction (that is a Matched Counterparty can enhance its functionality election from Address Only to Full Functionality, but it cannot do the opposite).

Amendments made to Covered Documents under Notices Hub Module 1

Among others, the Notices Hub Module 1 incorporates various amendments to the Protocol Covered Documents to (i) permit delivery of Covered Notices via the ISDA Notices Hub (if Full Functionality is elected by both Matched Counterparties), (ii) update references to the Notices Details maintained on the ISDA Notices Hub, (iii) permit changes to Notice Details by updating such details on the ISDA Notices Hub, and (iv) include new standalone provisions to Section 12 (Notices) relating to maintenance obligations of Notice Details and in respect of effectiveness of Covered Notices delivered by way of the ISDA Notices Hub.

How do market participants know that notices delivered via the ISDA Notice Hub will be effective?

ISDA has commissioned opinions for each of the governing law jurisdictions for which it publishes the ISDA Master Agreement (England and Wales, New York, France and Ireland) to help market participants determine the effectiveness of using the ISDA Notices Hub to update Notice Details and deliver Covered Notices. Additionally, opinions have also been commissioned in various non-governing law jurisdictions considering the applicable law for determining the effectiveness of delivery and whether a signature is required for a notice to be delivered effectively.

Commentary

Whilst the introduction of the ISDA Notices Hub appears to be a significant step forward in respect of the management of Notice Details and the delivery and receipt of Covered Notices, the platform’s success will largely depend on whether there is widespread adoption of the platform as well as market participants’ related appetite for scalability (that is the demand for further Protocol Covered Documents and Notice Hub Modules). Furthermore, to the extent there is widespread adoption of the ISDA Notices Hub platform, we will need to wait and see how the new-found instantaneous notice delivery capabilities of the adhering parties are used, that is if they are significantly relied upon, or whether they simply become another base to cover when serving Covered Notices (in addition to service via the traditional delivery methods). In any case, with promising early support in mind, we will continue to observe this space to see if the ISDA Notices Hub evolves to become the “faster, safer and more efficient method” and “golden source” envisaged by ISDA.

The authors wish to thank Lewis Hall, Norton Rose Fulbright LLP, for his contribution.