Template:Isda Preamble summ: Difference between revisions

The {{isdama}} is in need of a scene-setter: everyone, once, stares at that gnomic title and thinks, “okay, what on earth is ''this'' all about?”

The ISDA’s {{ {{{1}}}|Preamble}} is just the loosener before things get going. There is not a lot to see, but it casually calls the reader’s attention to things that will later become important — the proverbial rifle hanging above the fireplace that goes off in the third act. That is, however, where the similarities with Chekhov end. Before long, it will go full Dostoyevsky on us.  

The {{isdama}} is the basic framework that applies to anyone who touches down on planet [[ISDA]]. The preamble tells us about its tri-partite form: the '''Pre-printed Master''', a '''{{{{{1}}}|Schedule}}''' of elections and amendments, '''{{{{{1}}}|Confirmation}}s''' setting out the terms of '''{{{{{1}}}|Transaction}}s''' and — well, ''this'' is controversial: for is it, or is it not, part of the {{isdama}} proper? — a '''[[Credit Support Annex]]'''.

{{drop|T|here are two}} versions still conceivably in use — the {{2002ma}} and the {{1992ma}}, which we call the “[[Modern ISDAs]]”; two more or less fully retired versions, the {{1987ma}} and the {{1985ma}} which we call the “[[Ancient ISDAs]]”, and one, the {{2008ma}}, that died during the act of conception and never made it to the market but exists as an apocryphal testament to the enduring, wishful optimism of derivatives lawyers the world over.<ref>No, there is no such thing as a {{2008ma}}.</ref> We call the “[[The Atlantis Variation|Atlantis Variation]]”.

The [[2008 ISDA Decentralised Automomous Organisation-as-an-Agreement]] — a “this-fixes-everything, [[Blockchain|on-chain]], [[Smart contract|smart]], [[artificially intelligent]]” was introduced during, and tragically destroyed by, the [[Global Financial Crisis]].  

Oh, all right there ''isn’t'' a {{2008ma}}. Never was. This one ''is'' a  running [[JC]] in-joke. Talking to yourself might not be the first sign of madness, but having ''in-jokes'' with yourself might be. One day JC will write a novel about it. Swear to God.

All usable versions of the {{isdama}} have a Schedule with a semi-rigid structure. The first four parts contemplate making certain elections and representations, agreeing what financial disclosure each party should make and to whom, specifying names, addresses, contact details, agents, friends and relations, the last part is the “any other business” where your credit team can gild the lily and you can set out agreed amendments to the pre-printed form.  

A quick word on etiquette: one would ''never'' inline amend an ISDA Master Agreement — mostly they pass around the market in .pdf form, so you couldn’t anyway, but even if you could it would be unspeakably bad form to try — if you do want to make amendments to the legal or economic terms you put them in the Schedule. There are prudent [[legal design]] reasons for this, though over the years the amount of freestyle “Part 5” amendment has grown to the point where the Schedule is often longer than the Master Agreement proper. Much of this is quite unnecessary and, for lovers of clarity and documentary elegance, a cause for great regret.

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.

[[Jolly Contrarian|JC]]’s extensive research<ref>[https://www.google.com/search?q=%22International+Swap+Dealers+Associations%22+plural Let me Google that for you]. I know, right.</ref> has not yielded an explanation for why ISDA ever considered itself a plural, and the chatbots he consulted all came up with absurd reasons like — and I kid you not — inclusivity, collectvity, and global representation: “using Associations”, speculated [[NiGEL]], “might have aimed to convey a broader representation of various swap dealers across the globe, even though it wasn’t a merger of multiple entities”. Perhaps, it continues, “founders anticipated incorporating other regions or types of swap dealers in the future, which never materialised”.

In any weather, in 1993, it rebranded itself as the “International Swaps and Derivatives Association, Inc.”: singular, at the same time more unitary and ''more'' inclusive sounding, of buy-siders, but still in spirit the same old ISDA, stake-held predominantly by the largest [[swap dealer]]s on the face of the Earth.  

These days the “buy-side lobby” is bigger, more organised and better represented than it used to be, with the following associations representing its interests: