The 2026 FX Definitions

Definitions contain important product-level terms that are typically incorporated into parties' trade confirmations. For foreign exchange (FX), the market standard set of definitions has been the 1998 FX and Currency Option Definitions (the 1998 Definitions) for more than 20 years. This is set to change.

In March 2026, the International Swaps and Derivatives Association, Inc. (ISDA) and EMTA, Inc. (EMTA) published Version 1.0 of the 2026 FX Definitions (the 2026 FX Definitions). The 2026 FX Definitions do not automatically replace the 1998 Definitions, nor do they automatically impact existing or new trades. However, their publication marks the beginning of a significant implementation phase for the market. The scheduled go-live date is 22 November 2027.

Like the 2021 Interest Rate Definitions (the 2021 Definitions) and the 2002 ISDA Equity Derivatives Definitions (VE), the 2026 FX Definitions are digitised and published through ISDA’s online MyLibrary platform rather than in paper or PDF format. This means that amendments can be incorporated directly into a new consolidated version of the definitions, rather than via standalone supplements.

The 2026 FX Definitions are much more than a digitisation exercise, however. Read on for a summary of some of the key changes, including:

• new architecture
• streamlining and consolidation of EMTA templates for emerging markets (EM)
• overhaul of disruption events
• updates to Calculation Agent provisions
• and more.

New architecture: The Main Book

The 2026 FX Definitions adopt a Main Book and Matrix architecture. The Main Book contains the core definitions and provisions. Five Matrices pre-populate certain elections for the parties where they apply, reducing the need for bespoke confirmation language.

With the exception of the EM Currency Matrix, each Matrix applies automatically whenever the 2026 FX Definitions govern a Transaction. The EM Currency Matrix applies only where the parties so specify in the Confirmation, or where both the ‘Transaction Type’ and the ‘Currency Pair’ for that Transaction are included in the EM Currency Matrix.

ISDA has also published the 2026 FX Definitions Consolidated Confirmation Templates and the 2026 FX Definitions Currency Pair Quoting Conventions.

Streamlining and consolidation

Over the years, a number of supplements, additional provisions and other documentation developed around the 1998 Definitions. The 2026 FX Definitions have consolidated much of this.

Notably, the current EMTA template terms, which set out standard terms (such as Settlement Rate Options and fallbacks) for non-deliverable transactions in individual EM currencies, are being replaced by the EM Currency Matrix and the ‘Additional Provisions for Non-Deliverable Transactions (EM)’ (set out in Sections 9.4 to 9.7 of the 2026 FX Definitions). This streamlined approach should be more efficient for the parties. Instead of monitoring for the publication of individual sets of EMTA template terms for the relevant EM currency pairings and transaction types, the parties will monitor for updates to the 2026 FX Definitions and Matrices.

Overhaul of Disruption Events

Disruption Events and their associated fallbacks have been a particular focus of the 2026 FX Definitions project. They have been updated and rationalised (including the removal of some events) and, in certain cases, new Disruption Events and Disruption Fallbacks have been included.

Deliverable Transactions – Presumed Disruption Events and Fallbacks

The 1998 Definitions contained no dedicated disruption framework for deliverable FX transactions. The 2026 FX Definitions introduce one for the first time, reflecting lessons learned from recent periods of market stress.

Under the 2026 FX Definitions, disruption events for ‘General Settlement or Conversion Disruption’, ‘Material Change in Circumstances’ and ‘Settlement System Disruption’ are presumed to apply, with a suite of related fallbacks. For Offshore CNY Transactions, instead of this approach, two specific ‘Offshore CNY Disruption Events’ (relating to inconvertibility and non-transferability events), and fallbacks, are presumed to apply.

Non-Deliverable Transactions – Presumed Disruption Events and Fallbacks

Under the 1998 Definitions, the ‘Price Source Disruption’ disruption event was deemed to apply.

For Non-Deliverable Transactions on developed markets, this continues to be the case under the 2026 FX Definitions.

For emerging markets, the new EM Currency Matrix under the 2026 FX Definitions is intended to replace the currency-by-currency approach to disruption events set out in the current EMTA template terms and supplements. Under the EM Currency Matrix, a range of disruption events for the relevant transaction type and currency pair are presumed to apply.

Customisation

If the parties do not want the presumed disruption events and fallbacks to apply, or they want to apply additional disruption events or different fallbacks, they will need to make that clear in the relevant Confirmations.

Calculation Agent

The provisions governing the actions and determinations of the Calculation Agent have been updated in the 2026 FX Definitions. In particular:

• Where neither the Confirmation nor the relevant master agreement specifies the Calculation Agent, the 2026 FX Definitions provide a default fallback position: the Calculation Agent will be the party to the Transaction which is a dealer or market maker that trades FX transactions on both sides of the market (or both parties acting jointly, if both parties satisfy this requirement). Joint Calculation Agent dispute resolution provisions have also been included and must be specified to apply if the parties wish to make use of them.
• A catch-all provision clarifies that the Calculation Agent is responsible for all calculations and determinations that are not otherwise allocated, with the exception of the determination of whether a Disruption Event applicable to a Transaction has occurred.
• The Calculation Agent must act, and make determinations, in good faith and using commercially reasonable procedures to produce a commercially reasonable result. This aligns with the wording in the close-out provisions of the 2002 ISDA Master Agreement and the approach taken in the 2021 Definitions.
• Certain new procedural requirements apply to the Calculation Agent when making determinations. In particular, the Calculation Agent is required to notify the parties as soon as reasonably practicable after making any required determination and, upon request, to provide reasonable detail of any calculations made by it in connection with that determination. The Calculation Agent must therefore be prepared to disclose how its determinations were reached, potentially within short timeframes.

Other Changes

The 2026 FX Definitions introduce a number of further changes that market participants should be aware of, including updates to the Business Day definitions and framework, provisions to address unexpected holidays, and the introduction of an optional ‘Full Automated Exercise’ mechanism.

Versioning

Where the 2026 FX Definitions are incorporated, the version of them that will apply to a Transaction will always be the latest version on the Trade Date, unless the parties agree otherwise.

Similarly, where a Matrix applies, the version of that Matrix in effect on the Trade Date will govern, and any elections made in the Confirmation will prevail in the event of inconsistency with the Matrix.

This versioning approach has particular implications for master confirmation agreements (MCAs). It cannot be assumed that all transactions governed by an MCA will reference the same version of the 2026 FX Definitions or Matrices, as the applicable version will depend on the Trade Date of each individual transaction. This approach is consistent with other recent ISDA definitions sets, including the ISDA Equity Derivatives Definitions (VE) and the 2021 Interest Rate Definitions. It is also possible for parties to agree to incorporate specific versions of the 2026 FX Definitions and Matrices into their documentation, which would override these provisions — though this would require repapering if the parties later wished to move to a more recent version.

Preparing for Implementation

With go-live scheduled for 22 November 2027, market participants should be turning their attention to practical preparation. Key areas of focus include the following.

• Updating documentation and systems. Template confirmations, master confirmation agreements and other standard form documentation will need to be updated to incorporate the 2026 FX Definitions. ISDA has recently published a set of colour-coded annotated confirmations which could form a sensible starting point for this exercise. However, given the structural shift to the Main Book and Matrix architecture, and the consolidation of EMTA template terms, sufficient time should be factored in to complete this exercise and the relevant teams should be lined up as various decisions may need to be made along the way. Changes to operational processes and systems will also need to be considered.
• Disruption event preparedness. The introduction of presumed disruption events and fallbacks for deliverable transactions is a significant change. We would suggest that parties review their existing positions and consider whether they wish to disapply any of the presumed events or fallbacks for particular transactions or counterparty relationships. For EM currencies, the transition from individual EMTA template terms to the EM Currency Matrix will require careful mapping to ensure that disruption coverage remains appropriate.
• Legacy trades. The 2026 FX Definitions will not automatically apply to existing trades. If parties wish to migrate legacy transactions to the new framework they will need to do so bilaterally, as no industry protocol is currently planned.
• Monitoring for new versions. Parties will need to have processes in place to monitor for new versions of the 2026 FX Definitions and Matrices, and to assess their impact. The versioning approach taken in the new definitions (under which the applicable version is determined by Trade Date) means parties may need to manage multiple versions of the definitions and Matrices concurrently across their portfolios.
• Training and awareness. Front office, legal, compliance and operations personnel will all need to be familiar with the new framework well ahead of go-live.

Contact us

For further information on the 2026 FX Definitions, please speak to your usual Simmons & Simmons contacts or any of the contacts named in this article.