2011 ISDA Equity Derivatives Definitions

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The doomed Linklaters squadron shortly before embarking on the fateful drafting run.

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Ah, the ill-fated 2011 ISDA Equity Derivatives Definitions. Also known as the “Hindenburg variations”, after the dirigible hot-air derivatives disaster of 1937.[1] Oh, it seemed such a good idea. So advanced: lighter than air swaps. Can you even imagine it? So high-tech, incorporating the very latest mark-up language — the much vaunted Financial products Markup Language. There are Linklaters lawyers alive today — alive, though changed — who have not yet refilled the existential void hollowed out from their souls by the years lost to converting all that ludicrous text into FpML.

The mere mention of Flight 19, the squadron of Linklaters FPML Avenger torpedo bombers who lost contact with reality during a routine drafting mission and were never seen again, draws a shudder from hardened ISDA ninjas, even today.

As of 8 July 2021, the “2011s” reached their first decade of life on earth, and it’s been so far a lonely experience. In that time the planet has added another nine hundred million people, but not one of them, as far as we know, is using the 2011 ISDA Equity Derivatives Definitions. Not a single soul.

Yet, like one of those millennial cults which predicted the end of the world in June 2010, woke up with a surprise on the first of July, did a double take, scratched its head, and said “well it is coming, just not today”. ISDA, still predicts that “all categories of privately negotiated derivatives will eventually be included within the standard”.

In the long run, maybe.[2]

But yet ISDA ploughs on: credit it at least for derring-do. It now tells us, courtesy of a 50-page white paper of October 2020[3] that it can consolidate and standardise securities lending terms with derivatives terms. And, no doubt, convert them all to FpML.

See also


  1. For younger readers, the German passenger airship LZ 129 Hindenburg caught fire and was destroyed during its attempt to dock with its mooring mast in New Jersey at the end of its maiden transatlantic voyage, on May 6, 1937. The event shattered public confidence in giant, air-filled equity derivatives and marked the abrupt end of the inflatable swaps era. [Shouldn’t that be “inflation” swaps? — Ed.]
  2. “But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again.” — John Maynard Keynes, A Tract on Monetary Reform (1923).
  3. If you can find it in yourself to read it, do write in and tell me what it says.