In brief
The 2026 FX Definitions have been published on 3 March 2026 by the International Swaps and Derivatives Association, Inc. (ISDA) and the Trade Association for the Emerging Markets (EMTA). The 2026 FX Definitions introduce an integrated framework for FX derivatives transactions, and will replace the 1998 FX and Currency Options Definitions from 22 November 2027. The new definitions address significant market developments since 1998, and significantly overhaul the existing fragmented documentation, consolidating it into a unified standard framework for FX derivatives.
The 2026 FX Definitions will become the standard for all cleared and new non-cleared FX derivatives from 22 November 2027, with legacy transactions transitioning by the end of 2028. It is expected that FX transactions confirmed via SWIFT messages will incorporate the 2026 FX Definitions after that date.
Key takeaways
New document architecture
- The 2026 FX Definitions will be comprised of the Main Book (Main Book), together with a number of modular matrices containing reference data or confirmation elections.
- The Main Book consolidates the substantive operative provisions that to date have been spread across the ISDA 1998 FX and Currency Option Definitions and its Annex A, master confirmation agreements (MCAs), FX product-specific supplements, EMTA template terms and various other additional market standard provisions.
- The new Matrices comprise the Settlement Rate Options Matrix, EM (Emerging Markets) Currency Matrix, DM (Developed Markets) Currency Matrix, Currencies/Financial Centers Matrix and the Offshore CNY Fallback Matrix.
In more detail
Significant new or changed provisions include:
- Deliverable FX transactions will now automatically include three Disruption Events: general settlement or conversion disruption, material change in circumstance, and settlement system disruption.
- For deliverable FX transactions there is also a new elective disruption event for specific settlement or conversion disruption and a new disruption fallback of Calculation Agent determination of settlement method
- Specific provisions address deliverable offshore 'offshore CNY (CNH)' – CNY traded and settled in offshore centers, such as Hong Kong and Singapore, reflecting their unique characteristics.
- The calculation agent standards in the 2026 FX Definitions will align with those in the 2021 ISDA Interest Rate Derivatives Definitions. The calculation agent must act in "good faith using commercially reasonable procedures, to produce a commercially reasonable result".
- The 2026 FX Definitions also introduce optional methods to address economic effects caused by unscheduled market events that that results in additional non-business days and causes the term of an FX forward to increase.
- A new alternative exercise mechanism for deliverable, European style options (called full automated exercise) is introduced, relying on published rates and removing manual exercise notifications.
For more information reach out to our specialist markets and derivatives practitioners, Hamish McCormack and Teresa Ientile and refer to the ISDA publication Introduction to the 2026 FX Definitions, here.