Non-Reliance - ISDA Provision

2002 ISDA Master Agreement
A Jolly Contrarian owner’s manual™

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[[{{{1}}} - 1992 ISDA Provision|This provision in the 1992]]

Index: Click ᐅ to expand: 2002 ISDA 1992 ISDA

Section Non-Reliance in a Nutshell™

Use at your own risk, campers!

(1) Non-Reliance: (a) It is acting for its own account, and has made its own independent decisions to enter into the Transaction having determined it is appropriate and proper having obtained such professional advice as it has considered necessary. (b) It is not relying on the other party for any investment advice or recommendation to enter into the Transaction, and it acknowledges that information about and explanations of the terms and conditions of a Transaction will not be considered as such. (c) Neither party gives any assurance or guarantee as to the expected results of the Transaction. view template

Full text of Section Non-Reliance

(1) Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction, it being understood that information and explanations related to the terms and conditions of a Transaction will not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party will be deemed to be an assurance or guarantee as to the expected results of that Transaction. view template

Related agreements and comparisons

Click here* for the text of Section Non-Reliance in the 1992 ISDA* Template:Isdadiff Non-Reliance

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Content and comparisons

Along with Assessment and Understanding and Status of Parties, Non-Reliance is a pre-printed Additional Representation in the standard Schedule to the ISDA Master Agreement, coming under the heading Relationship Between Parties.

Template

Summary

Also, for good order, in not so many words and for no compelling reason, reproduced in Article 13.1 of the 2002 ISDA Equity Derivatives Definitions.

You might ask why this representation wasn’t included somehow in Section 3 of the ISDA Master Agreement, along with all the other Representations. Perhaps it was an afterthought — though it is hard to udnerstand if so why it made it to the pre-printed schedule.

In any case, the contents of this representation are throroughly uncontroversial: it is designed purely to head off mendacious, buyer’s remorse-inflected regrets at having participated in a transaction in which one has lost money.

The deal is that swap dealers, sitting as they do on the public side of the great wall of information barriers that runs down the middle of an investment bank, owe no fiuciary obligations^[1] and give no advice and operate at arm’s length — so this is really just a fancy way of saying BUYER BEWARE. If you want advice, go see an investment adviser.

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References

↑ This rule is progressively honoured in the regulatory breach, by the way, with things like best execution, but it remains the operating theory.

[1] This rule is progressively honoured in the regulatory breach, by the way, with things like best execution, but it remains the operating theory.

[1]

Non-Reliance - ISDA Provision

Content and comparisons

Summary

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References