Template:1987 v 1992 comparison summary

The 1992 ISDA was introduced principally, to:

Expand range of products covered: Expand beyond interest rate and currency swaps.
Netting: Enhance and strengthen close-out netting.
Market developments: Reflect market developments — the period between 1987 and 1992 was a massive growth in the swaps market, and lessons were learned.
Physical delivery: Allow for physical delivery of underlying instruments referenced in a swap (the only “underlying” for rates and fx is cash, so the 1987 ISDA only needed to contemplate the payment of cash).
Settlement Amounts: Introduce greater flexibility for determining {{{{{1}}}|Settlement Amount}}s on termination of {{{{{1}}}|Transactions}} (introducing the {{{{{1}}}|Loss}}, {{{{{1}}}|Market Quotation}}, {{{{{1}}}|First Method}} and {{{{{1}}}|Second Method}} regimes thereafter replaced in the 2002 ISDA by {{{{{1}}}|Close-out Amount}}).
Two-way payments on termination: Under the 1987 ISDA a {{{{{1}}}|Defaulting Party}} is not entitled to termination payments. This is the so-called “limited two-way payments” provision which was a large part of the reason 1987 ISDAs were not reliable on netting.
Settlement netting: more flexibility for netting groups of transactions under Section {{{{{1}}}|2}} - under the 1987 ISDA you could either net just within a single {{{{{1}}}|Transaction}} or across all Transactions but not, as standard, across a given subset of {{{{{1}}}|Transactions}}.