Template:M summ 2002 ISDA Assessment and Understanding

Having assured the assembled that you have understood the Transaction and taken such advice as you need to determine that it is suitable, this representation allays the lingering existential doubt your counterparty might have that, notwithstanding your status (represented/determined elsewhere) as a Qualified Institutional Buyer, professional client, institutional investor or whatever other designation of competence a regulator might habitually expect, you might still be so stupid as to not understand that you don’t understand the Transaction, or the professional advice you have obtained about that Transaction. One gets comfort by a follow on rep that one is capable of understanding the merits and risks of the transaction. Neat, tidy, and job done...

... except there is a whopping great elephant there, standing on a stack of turtles. For how are we supposed to know whether you are capable of determiningwhether you are capable of understanding the merits of the transaction?

Fortunately the ’squad — and knowing them as we do, we feel they must have been sorely tempted to keep going at least for a little bit, just to see where it took them — eschewed the opportunity to jump down that rabbithole, and executed a deft, and quite uncharacteristic, kick to touch.