Template:Isda Preamble comp: Difference between revisions

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Like all good stories, the ISDA starts with a {{ {{{1}}}|Preamble}}. Everyone, once, stares at that gnomic title and thinks, “okay, what the hell is ''this'' all about?” 
The Preamble to the {{1987ma}} had an extra feature: the {{isda87prov|single agreement}} provision. By 1992, this had been moved to its own little subclause in Section {{{{{1}}}|1(c)}}, and there it has stayed ever since.


Well, step this way, young padawan. Step into this rabbithole. A fellow called Gerald<ref>[http://legalfitz.co.nz/ Hi Gerald!]</ref> asked a callow young contrarian to look at an [[eye-ess-dee-aye|aye-ess-dee-aye]] once, in about 1995, and — well, here we all are, folks. Honestly, if I had known how much time I was going to spend with the damn thing I would have paid a lot more attention in the first place.
As for the [[modern ISDAs]], there is little material difference between the {{1992ma}} and the {{2002ma}} here. By 2002, {{icds}} was a more world-weary, battle-hardened unit  than it was in 1992, and was more alive to the idea that one might document {{isdaprov|Transaction}}s other than via a full-blown {{isdaprov|Confirmation}}. Particularly in the [[equity derivatives]] world, because the asset class tends to be fairly vanilla, the market was starting to generate [[MCA|Master Confirmation Agreement]]s for certain markets and regions, meaning that commoditised swap transactions could be fully automated and electronically completed through online trade matching systems without any faxed bits of paper saying “Dear Ladies and Gentlemen” and similarly genteel things that are so archaic as to seem, in these snow-flecked days, mildly offensive.
 
====A word on industry associations====
Those with a keen eye will note that, some time between 1992 and 2002, [[ISDA]] rebranded from the “International Swap Dealers Associations, Inc.” — interesting plural, that, but in any case an outwardly ''sell-side'' outfit — to the more neutral-sounding “International Swaps and Derivatives Association, Inc.” singular, at the same time more unitary and more inclusive by name, but still in spirit the same old outfit, stakeheld predominantly by the 20 largest broker-dealers on the face of the Earth. It may have aspirations to conquer the world but for now ISDA remains a “dealer-community” association.
 
These days the “buy-side lobby” is a lot bigger, more organised and better represented than it used to be, with AIMA (the Alternative Investment Management Association),<ref>https://www.aima.org</ref> EFAMA (the European Fund and Asset Management Association,<ref>https://www.efama.org</ref> the MFA (the Managed Funds Association),<ref>https://www.managedfunds.org</ref> (not to be confused, by the way, with the Fund Management Association of Kenya) and the IA (the Investment Association),<ref>https://www.theia.org</ref> representing their interests.
 
====The preamble====
The {{ {{{1}}}|preamble}} is just the loosener before things get properly going, and there is not a lot to see. It has not really changed a lot between the {{1992ma}} and the {{2002ma}} (nor indeed, from the {{1987ma}}, except that the {{isdaprov|Single Agreement}} clause got promoted from a casual remark during the warm-up, in the {{1987ma}}, to the first searching delivery of the first over.<ref>Cricket metaphor. To our American readers, we would say sorry, except that we are not. There will be cricket analogies throughout.</ref>

Latest revision as of 16:20, 16 February 2024

The Preamble to the 1987 ISDA had an extra feature: the single agreement provision. By 1992, this had been moved to its own little subclause in Section {{{{{1}}}|1(c)}}, and there it has stayed ever since.

As for the modern ISDAs, there is little material difference between the 1992 ISDA and the 2002 ISDA here. By 2002, ISDA’s crack drafting squad™ was a more world-weary, battle-hardened unit than it was in 1992, and was more alive to the idea that one might document Transactions other than via a full-blown Confirmation. Particularly in the equity derivatives world, because the asset class tends to be fairly vanilla, the market was starting to generate Master Confirmation Agreements for certain markets and regions, meaning that commoditised swap transactions could be fully automated and electronically completed through online trade matching systems without any faxed bits of paper saying “Dear Ladies and Gentlemen” and similarly genteel things that are so archaic as to seem, in these snow-flecked days, mildly offensive.

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