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Isda launches evergreen novation protocol

The NPII protocol replaces the 2005 Novation Protocol, launched in September, to regularise transfers of assignment to third parties in privately negotiated derivatives sales.

It replaces the requirement for prior written consent from the third party in an assignment trade, replacing it with an exchange of electronic agreements. The protocol will apply to credit and interest rate derivatives.

The first novation protocol closed on December 1, 2005, with almost 2,000 signatories. The NPII is 'evergreen' as it will be open permanently.

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