Template:M comp disc 2002 ISDA 2(a)(iii)

Section 2(a)(iii) is the world-famous, notorious, much-feared “flawed asset” provision in the ISDA Master Agreement. The text was mostly unchanged between the 1992 ISDA and the 2002 ISDA, bar a single clarification in Section 2(a)(iii)(3). There was a change from the 1987 ISDA which did not have the middle condition precedent that “no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated”. As to what all this means, or achieved, we speculate below.