Template:M summ 1995 CSA 11(a)

Two interesting (lack of) design points here: Firstly, the fallback for the Base Currency is specified in the Paragraph 11 election schedule and not the pre-printed definition of Base Currency inside the csa itself. The election schedule is the bit you amend, so by the lights of the Document Design Subcommittee of ISDA’s crack drafting squad™, you might expect your negotiated election to say: The Base Currency is United States dollars unless specified here: Pounds sterling.

This, it is submitted, would confuse someone not expecting it. Especially someone in a panic, who has just been sent a bad photocopy of a heavily amended fifteen-year-old ISDA and CSA of a counterparty whose credit is plummeting and told to quickly figure out how to close out this blessed agreement, with the head of risk breathes down her neck. Why, she will wonder, didn’t it just say, “Base Currency: Pounds sterling?”

Why indeed.

Point two is that, unlike the 1992 ISDA whose publication it quickly followed, the 1995 CSA does at least think about a fallback Base Currency for those who have forgotten to specify one. But the fallback it chooses, for an English law agreement, is US dollars. The one demographic least likely to be trading under an English law ISDA Master Agreement are those whose home currency is USD.

Lastly, ISDA has taken advantage of none of the many redrafting opportunities it has had since 1994 to correct either of these irritations. The 2016 VM CSA and the 2016 NY Law VM CSA both take the same approach.