ISDA Master Agreement

ISDA Anatomy™ →Go uptown Index: Click ᐅ to expand: ISDA Navigation See ISDA Comparison for a comparison between the 1992 ISDA and the 2002 ISDA. 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: FTPD • Breach • CSD • Misrep • DUST • Cross Default • Bankruptcy • MWA Termination Events: Illegality • FM • Tax Event • TEUM • CEUM • ATE 5 Events of Default: FTPD • Breach • CSD • Misrep • DUST • Cross Default • Bankruptcy • MWA Termination Events: Illegality • Tax Event • TEUM • CEUM • ATE 5 Events of Default: FTPD • Breach • CSD • Misrep • DUSS • Cross Default • Bankruptcy • MWA Termination Events: Illegality • Tax Event • TEUM • CEUM Early Termination 6 Early Termination: ET right on EOD • ET right on TE • Effect of Designation • Calculations; Payment Date • Payments on ET • Set-off 6 Early Termination: ET right on EOD • ET right on TE • Effect of Designation • Calculations • Payments on ET • Set-off 6 Early Termination: ET right on EOD • ET right on TE • Effect of Designation • Calculations • Payments on ET 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 Tell me more Sign up for our newsletter — or just get in touch: for ½ a weekly 🍺 you get to consult JC. Ask about it here.

Foundational concepts

• What is a swap, how does it work? – founding concepts:
• Underliers
• “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 and Calculation: of transactions – differing standards between asset classes
• Credit:
  • Events of Default and Termination Events, the differences between them
  • Cross Default and inadvertent solvency risks
  • Additional Termination Events that will be specific to counterparties
  • Credit Support Providers,
  • Specified Entities
• Close out:
  • How close out works
  • Netting and set off

Netting

• The importance of close-out netting
• Netting opinions
• Counterparty types
• Automatic Early Termination
• Collateral
• Multibranch parties

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

Tax representations

• Hire Act,
• FATCA,
• Payer Representations and Payee Representations

Process issues

• Capacity and authority
• Onboarding and AML
• Static data and netting flags

Who are the stakeholders?

• • Credit
  • Treasury
  • Legal
  • Trading
  • Sales

See also

• ISDA Anatomy
• 1992 ISDA
• 2002 ISDA