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Like all good stories, the ISDA starts with a {{ {{{1}}}|Preamble}}. Everyone, once, stares at that gnomic title and thinks, “okay, what the hell is ''this'' all about?” | Like all good stories, the ISDA starts with a {{ {{{1}}}|Preamble}}. Everyone, once, stares at that gnomic title and thinks, “okay, what the hell is ''this'' all about?” | ||
Well, step this way, young padawan. Step into this rabbithole. | Well, step this way, young padawan. Step into this rabbithole. | ||
Personal note: in Wellington, New Zealand, a chap called {{plainlink|http://legalfitz.co.nz|Gerald}} (if you’re reading, hi, Gerald!) asked a callow young contrarian to look have a look at this odd document that seemed to be called an {{aies}} once, in about 1995, and — well, here we all are, folks. | |||
Honestly, if I had known how much time I was going to spend with the damn thing I would have paid a lot more attention to it in the first place. | |||
====A word on industry associations==== | ====A word on industry associations==== | ||
ISDA, | ISDA, which publishes the ISDA, ''was'' the “International Swap Dealers Association''s'', Inc.” — interesting plural, that — but in any case, outwardly a ''[[sell-side]]'' industry association. Sometime between 1992 and 2002, it rebranded itself as the “International Swaps and Derivatives Association, Inc.”: singular, at the same time more unitary and more inclusive sounding, but still in spirit the same old ISDA, stake-held predominantly by the largest broker-dealers on the face of the Earth. | ||
It may have aspirations to conquer the world — increasingly, it seems hell-bent on doing so, encroaching on the commodities, carbon, securities financing and crypto domains — but for now ISDA remains a “dealer-community” association, largely devoted to the swap. | |||
====Buy-side and sell-side==== | |||
We will have more to say about this [[The bilaterality, or not, of the ISDA|in later essays]], but for the time being note that in most swap transactions there is a “sell-side” dealer and a “buy-side” end user to an {{isdama}}. There is a small class of “inter-dealer” swap contracts, but these generally do not create quite the same excitement as do Transactions between dealers and their customers. | |||
====“Dealer” versus “broker”==== | |||
Swaps are inherently principal contracts, so the [[sell-side]] participant in a swap is always a “[[dealer]]”. ([[Broker]]s act as [[agent]]s to put a buyer and a seller together and charge a [[commission]]. [[Dealer]]s act as [[principal]], buying from a seller, and on-selling to a buyer, but the economic upshot of what they do in either case is the same.) | |||
====Buy-side trade associations==== | |||
These days the “buy-side lobby” is a lot bigger, more organised and better represented than it used to be, with AIMA (the Alternative Investment Management Association),<ref>https://www.aima.org</ref> EFAMA (the European Fund and Asset Management Association,<ref>https://www.efama.org</ref> the MFA (the Managed Funds Association),<ref>https://www.managedfunds.org</ref> (not to be confused, by the way, with the Fund Management Association of Kenya) and the IA (the Investment Association),<ref>https://www.theia.org</ref> representing their interests. | These days the “buy-side lobby” is a lot bigger, more organised and better represented than it used to be, with AIMA (the Alternative Investment Management Association),<ref>https://www.aima.org</ref> EFAMA (the European Fund and Asset Management Association,<ref>https://www.efama.org</ref> the MFA (the Managed Funds Association),<ref>https://www.managedfunds.org</ref> (not to be confused, by the way, with the Fund Management Association of Kenya) and the IA (the Investment Association),<ref>https://www.theia.org</ref> representing their interests. | ||
====The preamble==== | ====The preamble==== | ||
The {{ {{{1}}}|preamble}} is just the loosener before things get properly going, and there is not a lot to see. It has not really changed a lot between the {{1992ma}} and the {{2002ma}} (nor indeed, from the {{1987ma}}, except that the {{isdaprov|Single Agreement}} clause got promoted from a casual remark during the warm-up, in the {{1987ma}}, to the first searching delivery of the first over.<ref>Cricket metaphor. To our American readers, we would say sorry, except that we are not. There will be cricket analogies throughout.</ref> | The {{ {{{1}}}|preamble}} is just the loosener before things get properly going, and there is not a lot to see. It has not really changed a lot between the {{1992ma}} and the {{2002ma}} (nor indeed, from the {{1987ma}}, except that the {{isdaprov|Single Agreement}} clause got promoted from a casual remark during the warm-up, in the {{1987ma}}, to the first searching delivery of the first over.<ref>Cricket metaphor. To our American readers, we would say sorry, except that we are not. There will be cricket analogies throughout.</ref> | ||