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Long-form confirmation: Difference between revisions
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{{a|isda|}}A [[long form confirmation]], or “'''{{tag|LFC}}'''”, generally refers to the documentation for a financial transaction between two parties which have not (yet) formally signed a [[master agreement]] for that type of transaction. Instead they document the trade on a “long form” which deems a basic version of the relevant master agreement be in existence between the parties for the purposes of the transaction. | {{a|isda|}}A [[long form confirmation]], or “'''{{tag|LFC}}'''”, generally refers to the documentation for a financial transaction between two parties which have not (yet) formally signed a [[master agreement]] for that type of transaction. Instead they document the trade on a “long form” which deems a basic version of the relevant master agreement be in existence between the parties for the purposes of the transaction. | ||
This used to be totally cool but for many years the sober and upright legal fraternity have frowned madly on this format, and it is now shunned and marginalised. It even features in our [[Long form confirmation - FWMD|FWMD Top Trumps]] catalog. | |||
====Example: ISDA LFC==== | ====Example: ISDA LFC==== | ||
For example, an {{tag|ISDA}} {{tag|LFC}} incorporates by reference the {{isdama}}, without a {{isdaprov|Schedule}}, pulling in the provisions in the {{isdama}} concerning termination and close-out, representations, | For example, an {{tag|ISDA}} {{tag|LFC}} incorporates by reference the {{isdama}}, without a {{isdaprov|Schedule}}, pulling in the provisions in the {{isdama}} concerning termination and close-out, representations, so on. So - you have an ISDA without all the bother, right? | ||
In hindsight, a revolutionary idea, whose time will once again come, we think. But for the time being the cottage industrial complex of the ISDA negotiation world is managing to hold off the baying hounds of common sense, and we are going through the pantomime of separately negotiating what ought to be an utterly standard market contract. | |||
====Drawbacks==== | ====Drawbacks==== | ||