Continued Operations Instrument (COI) Frequently Asked Questions (FAQs)
Please note that the English language version of all translated content and documents are the official versions and that translations in other languages are for informational purposes only.
What is a Continued Operations Instrument (COI)?
A Continued Operations Instrument (COI) is a letter of credit or a cash escrow agreement that Registry Operators of new generic Top Level Domains must maintain to ensure the availability of funds to provide continuity of service should an issue with a registry arise.
Why do I need a Continued Operations Instrument (COI)?
According to Specification 8 of the new gTLD Registry Agreement, Registry Operators are required to have a COI that provides sufficient financial resources to cover the five critical registry functions specified in Section 6 of Specification 10, for six years from Registry Agreement contract execution.
What is the difference between a Cash Escrow and a Letter of Credit?
A Cash Escrow is a three-party contract describing a financial arrangement whereby funds are held by the escrow service provider until a predetermined outcome is met. Cash Escrows often require funds to be deposited up front, in full, and generally incur higher fees than Letters of Credit.
An Irrevocable Standby Letter of Credit is a letter issued by a bank that serves as a guarantee for payment to a beneficiary (ICANN org) under specified conditions. Letters of Credit (LOC) leverage the credit history of the requester to lower the amount of up-front funds required.
Who can issue a Continued Operations Instrument (COI)?
ICANN org does not recommend a particular provider, however ICANN org does stipulate certain parameters for acceptable COI providers as outlined in the Applicant Guidebook page 138-139 (A-44 & A-45).The responsibility and selection of a provider is up to each Registry Operator..
The COI provider should be a reputable financial institution, with a credit rating beginning with "A" and be insured at the highest level of its jurisdiction. If a Registry Operator cannot access any such financial institutions, the instrument may be issued by the highest-rated financial institution in the national jurisdiction of the applying entity, upon acceptance from ICANN.
How long do I have to maintain my Continued Operations Instrument (COI) coverage?
Per Section 1, Specification 8 of the base Registry Agreement, you are required to maintain a sufficient COI for (6) years from the execution date of your Registry Agreement.
What constitutes a "sufficient" Continued Operations Instrument (COI)?
Attachment to Module 2 – Evaluation Questions and Criteria – of the gTLD Applicant Guidebook provides a comprehensive list of COI criteria.
These being the following:
- The amount on the COI must be equal to or greater than the amount required to fund the registry operations to cover the cost of the five critical registry functions specified in Section 6 of Specification 10 for at least three years and is dependant on your projected Domains Under Management (DUM) count derived from the Standard Emergency Event Fee Table attached to the Emergency Back-End Registry Operator (EBERO) Agreement [PDF, 1 MB] (Attachment D1). In the event the LOC is drawn upon, the actual withdrawal amount would be tied to the cost of running those functions.
- The COI must name 'ICANN org or its designee' as the beneficiary. Any funds paid out would be provided to the designee who is operating the required registry functions.
- The COI must have a term of at least six years from the contract execution of the TLD covered. The COI may be structured with an annual expiration date if it contains an evergreen provision providing for annual extensions, without amendment, for an indefinite number of periods until the issuing bank informs the beneficiary of its final expiration or until the beneficiary releases the COI as evidenced in writing. If the expiration date occurs prior to the fifth anniversary of the delegation of the TLD, the registry operator will be required to obtain a replacement instrument.
- The COI must be issued by a reputable financial institution insured at the highest level in its jurisdiction. Documentation should indicate by whom the issuing institution is insured (i.e., as opposed to by whom the institution is rated).
- The COI will provide that ICANN org or its designee shall be unconditionally entitled to a release of funds (full or partial) thereunder upon delivery of written notice by ICANN org or its designee.
- Furthermore, an LOC must contain at least the following required elements:
- Issuing bank and date of issue.
- Beneficiary: ICANN / 12025 Waterfront Drive, Suite 300 / Playa Vista, CA 90094 / US, or its designee
- Registry Operator's complete name and address
- LOC identifying number
- Exact amount in USD
- Expiry date
- Address, procedure, and required forms whereby presentation for payment is to be made.
- Conditions: Partial drawings from the letter of credit may be made provided that such payment shall reduce the amount under the standby letter of credit. All payments must be marked with the issuing bank name and the bank's standby letter of credit number.
- LOC may not be modified, amended, or amplified by reference to any other document, agreement, or instrument.
- The LOC is subject to the International Standby Practices (ISP 98) International Chamber of Commerce (Publication No. 590), or to an alternative standard that has been demonstrated to be reasonably equivalent.
Does my Continued Operations Instrument (COI) need to be in a particular currency?
Your COI coverage should be in USD as outlined by page 139 (A-45) Attachment to Module 2 – Evaluation Questions and Criteria – of the gTLD Applicant Guidebook
How much coverage do I need to have in place and what determines the amount I need?
Your COI coverage should reflect at least the current amount of Domains Under Management (DUM), however to avoid having to adjust this amount frequently it is recommended to fund your COI based on your 3-year DUM projections. Please note that maintaining sufficient COI coverage is a responsibility and requirement of each registry operator, regardless of ICANN org prompts to do so.
Your required coverage amount is determined based on your DUM projections and can be derived from the Standard Emergency Event Fee Table attached to the Emergency Back-End Registry Operator (EBERO) Agreement [PDF, 1 MB] (Attachment D1).
Please note that in situations where one COI covers multiple gTLDs, the total funds required will be determined by analyzing the DUMs against each respective gTLD listed on the COI's allocation schedule and COI coverage must reflect the appropriate amount for each individual gTLD listed.
An allocation schedule is used when a single COI is used to cover multiple gTLDs. In this case a table specifying the allocation of funds to each of the gTLDs covered is included in the COI. This allows one instrument to effectively cover multiple gTLDs.
Can I lower my Continued Operations Instrument (COI) amount?
The Continued Operations Instrument (COI) Amendment Service provides a method for registry operators to request a change in the value of their COI funds to align with the projected number of domain registrations under management (DUMs) for a generic Top Level Domain (gTLD). The COI funds are an important part of safeguarding the operation of gTLDs by ensuring there are sufficient financial resources to protect the continuity of critical registry functions. A reduction in the amount of a COI must be approved by the ICANN org.
Under what circumstances might I need to change the amount of coverage I have?
There are several reasons why a registry operator may want to amend their COI:
If the ICANN org finds that a COI is insufficiently funded at any time after a gTLD has been delegated, the registry operator will be referred to the COI Amendment Service and will have 60 days to amend their COI funding level. To request a COI amendment, submit a new case via the Naming Services portal by selecting the correct form of COI (for Letter of Credit or Escrow Agreement).
Registry operators may request a change to the value of their COI to align with the updated Domains under Management (DUM) projections of a gTLD. In December 2011, the ICANN org published guidance to help registry operators calculate the estimated costs of gTLD operations based on projected DUM count. Since that time, the launch of new gTLDs has provided market-driven data points on which to base their projections.
When registered Domains Under Management (DUM) surpass required COI coverage defined on the Standard Emergency Event Fee Table attached to the Emergency Back-End Registry Operator (EBERO) Agreement (Attachment D1), the registry operator is required to increase their COI to ensure it is not underfunded. Please note that monitoring and maintaining sufficient COI coverage is a responsibility and requirement of the registry operator, regardless of ICANN org prompts to do so.
What requirements does ICANN org consider when approving the COI Amount Amendment request?
As part of the COI Amount Amendment process and as a courtesy, ICANN org reviews the full content of the COI undergoing amendment for any additional items that may require action. There are several requirements that ICANN org looks for while reviewing for additional changes. These requirements are as follows:
- Registry operators must wait at least six months from the date a COI was previously amended before further amending the same COI.
- The COI may be in the form of a Letter of Credit (LOC) or Escrow Agreement issued by the registry operator's bank.
- Updated projections
- Based on the increase or decrease in the number of DUMs outlined in the request, not current DUMs.
- The Standard Emergency Event Fee Table attached to the Emergency Back-End Registry Operator (EBERO) Agreement [PDF, 1 MB] (Attachment D1) will be the guideline for calculating the appropriate value of a COI based on DUMs projections. Please note that your coverage projections should be take into account your three-year DUM estimate, including projected growth.
- In situations where one COI covers multiple gTLDs, the total funds required will be determined by analyzing the DUMs against each respective gTLD listed on the COI's allocation schedule.
- Requests for amendments will be evaluated against the most current submitted Monthly Transaction Report.
- The registry operator is responsible for all banking fees associated with the amendment, including Advising Fees charged by an Advising Bank. This fee is approximately $250 per amendment.
- All requests must be submitted via the Naming Services portal and a new case should be created according to the correct form of COI (Letter of Credit or Escrow Agreement).
What is the process to amend my Continued Operations Instrument (COI) amount?
To initiate the process, the registry primary contact must complete and submit a new COI Amendment case, either for Letter of Credit (LOC) or Escrow Agreement, through the Naming Services portal.
Once submitted, the ICANN org will perform a completeness check of the request to confirm it meets the requirements and is approved to move forward. If the COI is in the form of a LOC, the item may be digitally advised through an advising bank or sent directly to ICANN org. The registry operator may then provide those instructions to their issuing bank to execute the amendment. If the COI is in the form of an Escrow Agreement, ICANN org will request that the registry operator work with the escrow institution to amend the Escrow Agreement. For a complete list of steps, please read the How to Submit a COI Amendment Request [PDF, 152 KB].
How long does the COI Amendment process take?
After a COI amendment has been requested, ICANN org's service level target is to provide the registry operator with a response in eight (8) business days informing the registry operator if the request has been approved or denied. Once ICANN org has approved the request, completion timing will vary depending on the responsiveness of the registry operator and their bank, but could be finished in as quickly as twenty-one (21) business days.
If the amendment request is due to a request from ICANN org, the process for the COI Amendment Service should be completed within sixty (60) calendar days.
Is the COI Amendment process the same in all regions?
Yes, however, there may be delays in the timeline for some regions/countries due to differences in bank approval processes.
Is there any cost associated with the COI Amendment Service?
Yes, there may be nominal banking fees associated with the service including, but not limited to, advising fees and amendment fees.
Does ICANN org have a preferred advising bank?
No, however ICANN org has an established relationship with Bank of America. The institution is well-respected and has the expertise needed to ensure that these COIs meet all relevant financial regulations and requirements. They maintain correspondence relationships with over 2,500 financial institutions globally. In addition, Bank of America has the infrastructure required to communicate securely with these banks. As such, Registry Operators may choose to advise new Letters of Credit through Bank of America for convenience. Bank of America may be reached via SWIFT: BOFAUS3N. Should an advising bank identify outstanding terms per their customary banking guidelines, registry operators must amend such terms as part of the COI Amendment Service process.
What are the benefits of advising my Letter of Credit (LOC)?
A primary benefit of advising an LOC is that all communications may be done digitally, without the need to utilize physical mail or physical documents. Advising allows your issuing bank to communicate the execution or amendments related to your Letter of Credit directly to an advising bank, via electronic means.
Can I advise a Cash Escrow document?
No, cash escrow documents are not advisable under normal circumstances, as they represent a legal contract instead of a guarantee and are subject to different regulations than a Letter of Credit would be.
How can I replace my current Continued Operations Instrument (COI)?
For Letters of Credit (LOC): Draft a replacement LOC document and submit a case via the Naming Service portal (NSp) requesting ICANN org review of the drafted language. You may also choose to use an ICANN org pre-approved language template to save time. Using the unaltered, pre-approved language template reduces the amount of time required for the ICANN org review process.
After ICANN org review, or utilization of ICANN org pre-approved language, you may have your issuing bank execute the new LOC by sending a SWIFT directly to an advising bank, or mailing the original physical documents to ICANN org.
For Cash Escrows: Draft a replacement Cash Escrow document and submit it via the Naming Service portal (NSp) requesting a review of the language by ICANN org. You may also choose to use an ICANN org pre-approved language template to save time. Using the unaltered, pre-approved language template reduces the amount of time required for the ICANN org review process
After ICANN org review, or utilization of ICANN org pre-approved language, you may have your cash escrow provider collect the necessary signatures required for executing the document.
Once ICANN org receives your newly executed COI document, it will process the release of the older COI on file.
What are the costs associated with replacing a Continued Operations Instrument (COI)?
The costs vary depending on the terms of your issuing bank or cash escrow provider and additional fees may be incurred during advisement, these also vary depending on the advising bank utilized. As an example, the standard advising fee for advising through Bank of America is $250 dollars.
Will ICANN org notify me when my Continued Operations Instrument (COI) is about to expire?
ICANN org does not send out notifications of upcoming COI expirations, the management and maintenance of the COI document is the sole responsibility of the contracted party.
What happens if my Continued Operations Instrument (COI) is scheduled to expire before my Registry Agreement's obligation ends?
The COI should either be amended to extend the expiry date or replaced in cases where an extension is not possible.
What is the difference between renewing, amending and replacing the Continued Operations Instrument (COI)?
A renewal occurs if your COI has an auto-renewal clause, which dictates that the document should be extended on a particular date every year, usually until a final expiry date is reached.
Renewals happen automatically and only impact the term that a COI remains valid for.
Amendments require action from the registry operator and change terms, clauses, amount or dates initially specified on the document. Amendments act more like a renegotiation or correction of the current terms and require ICANN org review and sign off in most cases.
A replacement happens when a new COI document is drafted, replacing an already existing COI document. New COIs will have a new reference number. They may also be issued by a different financial institution than the COI they replace.
Can I extend an expired Continued Operations Instrument (COI)? How long does it usually take?
It may be possible to retroactively extend the expired COI through an amendment process. Provided your financial institution allows for a retroactive extension of your COI, the processing of the amendment takes roughly 2-4 weeks.
In the event that extending is not possible, the contracted party must replace the expired item with a new COI document. Please note that any gaps in sufficient COI coverage may trigger escalation to ICANN org's contractual compliance department. The process to replace a COI may take anywhere between 2-8 weeks, depending on your financial institution's requirements.
What can I do to ensure that my Continued Operations Instrument (COI) is released in a timely manner at the date of my obligation end?
You may amend your existing COI to match your 6 year obligation end date, this ensures an exact automatic release of the document on file.
How do I change the Continued Operations Instrument (COI) expiration date to match my 6 year obligation end date?
Yes, you may request to amend your existing COI's final expiration date to match your 6 year obligation end date. For example, if you had executed your Registry Agreement in 4 May 2014, you may amend your final expiry to 4 May 2020, as this is the last day you are required to maintain a COI on file.
Will ICANN org release my Continued Operations Instrument (COI) after the Registry Agreements COI obligation ends?
As part of the COI Obligation Release Service, ICANN will automatically release COIs that are no longer contractually required. You will be notified the month prior to processing of the COI release. No action will be required from the Registry Operator and a notice confirming the release of the COI will be provided upon completion.
When is my Continued Operations Instrument (COI) eligible for release?
Your COI may only be released once another COI document has been but in place or after the 6 year obligation to maintain COI coverage has passed.
Please note that for COI replacement, ICANN org will only process release of the existing COI after the execution of the new replacement COI document.
Who do I contact for additional questions regarding my Continued Operations Instrument (COI)?
For more information, please visit the Continued Operations Instrument (COI) page on ICANN.org. Alternatively, you may contact ICANN Global Support: firstname.lastname@example.org with any additional questions.