Template:Isda Preamble summ: Difference between revisions

From The Jolly Contrarian
Jump to navigation Jump to search
← Older editNewer edit →
VisualWikitext
No edit summary
No edit summary
Line 1: Line 1:
====ISDA architecture====
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?” 
The legal documentation for an ISDA swap transaction comes in three main parts, but — of course — there are complications for the [[legal eagles]] to get their [[iatrogenic]] talons into. But for now, let’s start at the beginning.
=====The {{isdama}}=====
The {{isdama}} is the basic framework that applies to anyone who touches down on planet [[ISDA]]. There are three existing in-use versions:


'''{{2002ma}}: The still, after all these years, state-of-the-art '''{{2002ma}}'''.  
Well, step this way, young padawan. Step into this rabbithole. A fellow called Gerald<ref>[http://legalfitz.co.nz/ Hi Gerald!]</ref> asked a callow young contrarian to look at an [[eye-ess-dee-aye|aye-ess-dee-aye]] 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 in the first place.


'''{{1992ma}}''': The still-popular-with-traditionalists-and-Americans '''{{1992ma}}'''.
====A word on industry associations====
ISDA, who publishes the ISDA, is the International Swaps and Derivatives Association.  Those with a keen eye will note that, some time between 1992 and 2002, it rebranded from the “International Swap Dealers Association''s'', Inc.” — interesting plural, that, but in any case an outwardly ''sell-side'' outfit — to the more neutral-sounding “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 but for now ISDA remains a “dealer-community” association.  
'''{{1987ma}}''': The all-but-retired-but-don’t-forget-there-are-still-soldiers-in-the-Burmese-jungle '''{{1987ma}}'''<ref>Seriously: proceed with caution with one of these. {{1987ma}}s don’t have a lot of safety features a modern derivatives counterparty relies on, so only for real specialists and weirdos.</ref>


There are two non-functional versions:
As we note [[The bilaterality, or not, of the ISDA|elsewhere]], there is typically a “sell-side” broker and a “buy-side” end user to an {{isdama}}.


'''{{1985ma}}''': The interesting-only-for-its-place-in-the-fossil-record-and-witty-acrostic {{1985ma}}.
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.


'''{{2008ma}}''': The this-fixes-everything, on-chain, smart, artificially intelligent {{2008ma}} that was introduced during, and tragically destroyed by, the [[Global Financial Crisis]]. Oh, all right there ''isn’t'' a '''{{2008ma}}'''. That’s a little running [[JC]] in-joke.<ref>Talking to yourself might not be the first sign of madness, but having ''in-jokes'' with yourself might be.</ref>
====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>
All three versions have a tri-partite form: '''Pre-printed Master''', '''{{{{{1}}}|Schedule}}''', {{{{{1}}}|Confirmation}} and — well, ''this'' is controversial: for is it, or is it not, part of the {{isdama}}? — '''[[Credit Support Annex]]'''.

Revision as of 12:13, 30 December 2023

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. A fellow called Gerald[1] asked a callow young contrarian to look at an aye-ess-dee-aye 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 in the first place.

A word on industry associations

ISDA, who publishes the ISDA, is the International Swaps and Derivatives Association. Those with a keen eye will note that, some time between 1992 and 2002, it rebranded from the “International Swap Dealers Associations, Inc.” — interesting plural, that, but in any case an outwardly sell-side outfit — to the more neutral-sounding “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 but for now ISDA remains a “dealer-community” association.

As we note elsewhere, there is typically a “sell-side” broker and a “buy-side” end user to an ISDA Master Agreement.

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),[2] EFAMA (the European Fund and Asset Management Association,[3] the MFA (the Managed Funds Association),[4] (not to be confused, by the way, with the Fund Management Association of Kenya) and the IA (the Investment Association),[5] representing their interests.

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 1992 ISDA and the 2002 ISDA (nor indeed, from the 1987 ISDA, except that the Single Agreement clause got promoted from a casual remark during the warm-up, in the 1987 ISDA, to the first searching delivery of the first over.[6]

  1. ↑ Hi Gerald!
  2. ↑ https://www.aima.org
  3. ↑ https://www.efama.org
  4. ↑ https://www.managedfunds.org
  5. ↑ https://www.theia.org
  6. ↑ Cricket metaphor. To our American readers, we would say sorry, except that we are not. There will be cricket analogies throughout.
Retrieved from "https://jollycontrarian.com/index.php?title=Template:Isda_Preamble_summ&oldid=81535"