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.

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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
8. 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.
9. What is an allocation schedule and how can I use it? 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.
10. 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.
11. 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 guidanceto 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.
12. 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:
    1. Registry operators must wait at least six months from the date a COI was previously amended before further amending the same COI.
    2. The COI may be in the form of a Letter of Credit (LOC) or Escrow Agreement issued by the registry operator's bank.
    3. Updated projections
       1. Based on the increase or decrease in the number of DUMs outlined in the request, not current DUMs.
       2. 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.
       3. 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.
       4. Requests for amendments will be evaluated against the most current submitted Monthly Transaction Report.