ISDA Master Agreement: Difference between revisions

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{{anat|isda}}
====Foundational concepts====
*What is a swap, how does it work? – founding concepts:
*[[Underlier]]s
*“[[synthetic exposure]]”
*[[Mark-to-market]] value
*[[Replacement cost]]
*[[Hedging]]
====Architecture====
*'''Structure''': How it hangs together – Master/Schedule/CSA/Master Confirmations/Confirms
*'''Big drafting issues'''
**[[Valuation Agent - CSA Provision|Valuation]] and [[Calculation Agent - ISDA Provision|Calculation]]: of transactions – differing standards between asset  classes
**Credit:
***{{isdaprov|Events of Default}} and {{isdaprov|Termination Event}}s, the differences between them
***{{isdaprov|Cross Default}} and inadvertent solvency risks
***{{isdaprov|Additional Termination Events}} that will be specific to counterparties
***{{isdaprov|Credit Support Provider}}s,
***{{isdaprov|Specified Entities
**[[Close out]]:
 How close out works
 [[Netting]] and [[set off]]
o [[Netting]]
 The importance of [[close-out netting]]
 Netting opinions
 Counterparty types
 Automatic Early Termination
 Collateral
 Multibranch parties
o Collateral: How the CSA works
 Title transfer versus pledge
 “Equivalent” credit support
 Independent Amounts
 Changes wrought by regulations for variation margin
 Valuation of collateral and exposure values
o Tax representations: Hire Act, FACTCA, payer and payee representations
o Notices and communications
o Definitions booklets
- Process issues
o Capacity and authority
o Onboarding and AML
o Static data and netting flags
o Who are the stakeholders?
 Credit
 Treasury
 Legal
 Trading
 Sales
 
{{seealso}}
*[[ISDA Anatomy]]
*[[ISDA Anatomy]]
*{{1992isda}}
*{{1992isda}}
*{{2002isda}}
*{{2002isda}}
{{anat|isda}}

Revision as of 17:25, 13 January 2017

ISDA Anatomy™
incorporating our exclusive ISDA in a Nutshell™

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Index: Click to expand:Navigation
The Varieties of ISDA Experience
Subject 2002 (wikitext) 1992 (wikitext) 1987 (wikitext)
Preamble Pre Pre Pre
Interpretation 1 1 1
Obligns/Payment 2 2 2
Representations 3 3 3
Agreements 4 4 4
EODs & Term Events 5

Events of Default
FTPDBreachCSDMisrepDUSTCross DefaultBankruptcyMWA
Termination Events
IllegalityTax EventTEUMCEUMATE

5

Events of Default
FTPDBreachCSDMisrepDUSTCross DefaultBankruptcyMWA
Termination Events
IllegalityTax EventTEUMCEUMATE

5

Events of Default
FTPDBreachCSDMisrepDUSTCross DefaultBankruptcyMWA
Termination Events
IllegalityFMTax EventTEUMCEUMATE

Early Termination 6

Early Termination
ET right on EODET right on TEEffect of DesignationCalculations

6

Early Termination
ET right on EODET right on TEEffect of DesignationCalculationsSet-off

6

Early Termination
ET right on EODET right on TEEffect of DesignationCalculationsSet-off

Transfer 7 7 7
Contractual Currency 8 8 8
Miscellaneous 9 9 9
Offices; Multibranch Parties 10 10 10
Expenses 11 11 11
Notices 12 12 12
Governing Law 13 13 13
Definitions 14 14 14
Schedule Schedule Schedule Schedule
Termination Provisions Part 1 Part 1 Part 1
Tax Representations Part 2 Part 2 Part 2
Documents for Delivery Part 3 Part 3 Part 3
Miscellaneous Part 4 Part 4 Part 4
Other Provisions Part 5 Part 5 Part 5

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Foundational concepts

Architecture

 How close out works  Netting and set off o Netting  The importance of close-out netting  Netting opinions  Counterparty types  Automatic Early Termination  Collateral  Multibranch parties o Collateral: How the CSA works  Title transfer versus pledge  “Equivalent” credit support  Independent Amounts  Changes wrought by regulations for variation margin  Valuation of collateral and exposure values o Tax representations: Hire Act, FACTCA, payer and payee representations o Notices and communications o Definitions booklets - Process issues o Capacity and authority o Onboarding and AML o Static data and netting flags o Who are the stakeholders?  Credit  Treasury  Legal  Trading  Sales

See also