---
title: ISDA Response On Brexit Novations
description: EU counterparties have to wait until closer to exit date to novate contracts.
---

[Articles Marketmedia](https://articles.marketsmedia.com)

# [ISDA Response On Brexit Novations](https://articles.marketsmedia.com/isda-response-on-brexit-novations)

 Written by [Shanny Basar](https://articles.marketsmedia.com/author/shanny-basar) | Feb 13, 2019 10:19:16 AM

ISDA [sent a letter to ESMA](https://www.isda.org/a/7SiME/ISDA-Comments-on-the-proposed-technical-standards-on-Brexit-related-novations.pdf) and the European Commission commenting on the proposed technical standards on Brexit-related novations. ISDA welcomes these standards that seek to give relief from the margining and clearing requirements to OTC derivative contracts that are transferred (novated) from a UK to an EU counterparty.

However, the fact that the relief is contingent on the event of a no-deal Brexit makes it operationally difficult for firms to enter into agreements to novate contracts. We have concerns that EU counterparties are therefore required to wait until closer to exit day before carrying out the novations.

Source: ISDA

[View full post](https://articles.marketsmedia.com/isda-response-on-brexit-novations)

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