Template:Misrepresentation by agent

Representations by agents and investment managers

Where your client’s obligations under the ISDA Master Agreement are stewarded by an agent — quite common for an investment manager trading on behalf of a fund principal — you might think about asking the agent to represent on its own behalf about its role as agent, in the ISDA. You may like to hear it confirm its ongoing authority to bind the principal and place orders on its behalf. You may wish it would confirm its regulatory authorisation and and vouch for its own good standing, and to the continued involvement of its key persons in making investment decisions. Imaginative counsel can no doubt dream up others.

But tarry a while. Firstly, your investment manager will sign as agent, for the client, not on its own behalf. For many this will be an article of profound faith: they will be at some pains, which they will willingly inflict on you, to avoid the barest hint they are speaking for themselves. “When an agent, as agent opens its mouth,” they will tell you, “it becomes its principal for all purposes that interest the law.”

And so it does. As far as the courts of chancery are concerned, to be an agent is to be wholly transubstantiated into the person of the principal. Transmogrified. It is, for all forensic intents to disappear; your ghostly outline may still be there, but it is a chimaera: you exist only to be the earthly representation of your principal.

Which cast a pall over the representations you are being asked to make.

That