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Everyone, once, stares at that gnomic title and thinks, “okay, what the hell is ''this'' all about?”
{{quote|{{d|Chekhov’s gun|Russian: ''Чеховское ружьё''|n|}}
A narrative principle that states that every element in a story must be necessary, and irrelevant elements should be removed.


Like all good stories, the ISDA starts with a {{ {{{1}}}|Preamble}}. This is just the loosener before things really get going. There is not usually a lot to see, but a good writer sets the scene, lays some groundwork and casually calls the reader’s attention to things that later will become important — the proverbial rifle hanging above the fireplace that goes off in the third act. So it is with the ISDA — though that is where the similarities with Chekhov end. Before long, it will go full Dostoyevsky on us.  
“If there is a rifle hanging on the wall in the first act, it must go off in the third.”}}


The {{isdama}} is the basic framework that applies to anyone who touches down on planet [[ISDA]]. The preamble tells us about its tri-partite form: the '''Pre-printed Master''', a '''{{{{{1}}}|Schedule}}''' of elections and amendments, '''{{{{{1}}}|Confirmation}}s''' setting out the terms of '''{{{{{1}}}|Transaction}}s''' and — well, ''this'' is controversial: for is it, or is it not, part of the {{isdama}} proper? — a '''[[Credit Support Annex]]'''.
{{drop|A| preamble is}} he [[legal eagle]]’s opportunity to set a scene, a juridical version of “[[once upon a time]]”: an integrated passage that may or may not start with “[[whereas]]”, “[[background]]” or something like that and is meant to prime you for the meat of [[contract]].  


====Pre-printed master====
The {{isdama}} needs just such a scene-setter: everyone, once, stares at that gnomic title and thinks, “okay, what on earth is ''this'' all about?” That is the {{{{{1}}}|Preamble}}. There is not much to see but, casually, it calls the reader’s attention to things that will later become important — the proverbial rifle hanging above the fireplace that goes off in the third act.  That is where the similarities with Chekhov end, though: before long, it will go full Dostoyevsky on us.
There are two versions still conceivably in use, which we call the “[[Modern ISDAs]]”:
 
The {{isdama}} is the basic framework that applies to anyone who touches down on planet [[ISDA]]. The preamble tells us about its tri-partite form: the '''Pre-printed Master''', a '''{{{{{1}}}|Schedule}}''' of elections and amendments, and '''{{{{{1}}}|Confirmation}}s''' setting out the terms of '''{{{{{1}}}|Transaction}}s'''.
 
====ISDAs, Ancient and Modern====
{{drop|T|here are two}} versions of the ISDA still widely in use — the [[2002 ISDA Master Agreement]] and the [[1992 ISDA Master Agreement|ISDA Master Agreement (Multicurrency — Cross Border)]] which is known to all who love her as the [[1992 ISDA Master Agreement]]. These we call the “[[Modern ISDAs]]”.
 
There are two more or less fully retired versions: the [[1987 ISDA Interest Rate and Currency Exchange Agreement|ISDA Interest Rate and Currency Exchange Agreement]] of 1987 (the [[1987 ISDA Interest Rate and Currency Exchange Agreement|1987 ISDA]]) and the [[1985 ISDA Code of Standard Wording, Assumptions and Provisions for Swaps|ISDA Code of Standard Wording, Assumptions and Provisions for Swaps]] of 1985 (let’s call this the [[1985 ISDA Code of Standard Wording, Assumptions and Provisions for Swaps|1985 Code]], though few people have ever even seen one). These we call the “[[Ancient ISDAs]]”.
 
There is one, the [[2008 ISDA Master Agreement|2008 ISDA Decentralised Automomous Organisation-as-an-Agreement]] that died tragically during conception and never made it to the market but yet exists as an apocryphal testament to the enduring, wishful optimism of derivatives lawyers the world over.<ref>There was, of course, no such thing as the [[The Atlantis Variation|2008 ISDA]]. It is a plotline from [[Hunter Barkley]]’s [[Finance fiction|finance fiction]] potboiler [[The Atlantis Variation|''The Atlantis Variation'']].</ref> We call this the “[[The Atlantis Variation|Atlantis Variation]]”.


====={{2002ma}}=====
====={{2002ma}}=====
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Perhaps had the {{2002ma}} been ''more'' radical it might have stood a greater chance quick of adoption. On the other hand, the further the fruit falls from the tree, the greater the chance of outright failure. Just ask “[[Flight 19]]”, the poor, doomed Linklaters team who drafted the [[2011 ISDA Equity Derivatives Definitions|2011 Equity Derivatives Definitions]].
Perhaps had the {{2002ma}} been ''more'' radical it might have stood a greater chance quick of adoption. On the other hand, the further the fruit falls from the tree, the greater the chance of outright failure. Just ask “[[Flight 19]]”, the poor, doomed Linklaters team who drafted the [[2011 ISDA Equity Derivatives Definitions|2011 Equity Derivatives Definitions]].
=====Non-functional versions=====
 
There are two retired versions, which we call the [[Ancient ISDAs]], and one that died during the act of conception and never made it to the market, which we call the [[The Atlantis Variation|Atlantis Variation]]:
====={{1987ma}}=====
====={{1987ma}}=====
The [[1987 ISDA Interest Rate and Currency Exchange Agreement]] — it wasn’t, by name, a comprehensive “master agreement” — is all but a dead letter now. But, we sense, not ''quite''.  
The [[1987 ISDA Interest Rate and Currency Exchange Agreement]] — it wasn’t, by name, a comprehensive “master agreement” — is all but a dead letter now. But, we sense, not ''quite''.  
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These days interesting only for its place in the fossil record — and a witty acrostic that points to a playfulness among the [[First Men]] that has long since vanished, the {{1985ma}} was out of use well before the millennium. The JC only found out about it when visiting a retired ninja in a care home in 2015, and at first assumed it was some sort of urban myth or in-joke. But apparently not.
These days interesting only for its place in the fossil record — and a witty acrostic that points to a playfulness among the [[First Men]] that has long since vanished, the {{1985ma}} was out of use well before the millennium. The JC only found out about it when visiting a retired ninja in a care home in 2015, and at first assumed it was some sort of urban myth or in-joke. But apparently not.


====={{2008ma}}=====
====={{2008ma}} — “Atlantis”=====
The [[2008 ISDA Decentralised Automomous Agreement]] — a “this-fixes-everything, [[Blockchain|on-chain]], [[Smart contract|smart]], [[artificially intelligent]]” was introduced during, and tragically destroyed by, the [[Global Financial Crisis]].  
The [[2008 ISDA Decentralised Autonomous Organisation-as-an-Agreement]] — a “this-fixes-everything, [[Blockchain|on-chain]], [[Smart contract|smart]], [[artificially intelligent]]” was introduced during, and tragically destroyed by, the [[Global Financial Crisis]].
 
Oh, all right there ''isn’t'' a {{2008ma}}. Never was. This one ''is'' a  running [[JC]] in-joke. Talking to yourself might not be the first sign of madness, but having ''in-jokes'' with yourself might be. From the blurb to [[Hunter Barkley]]’s 2026 novel [[The Atlantis Variation|''The Atlantis Variation'']]: <blockquote>… the [[2008 ISDA Master Agreement|2008 ISDA]] would be a definitive, final, [[Flawed asset|flawless]] self-aware edition of the [[ISDA Master Agreement]]. Short, plainly worded, future-proofed and agile, it would allow counterparties to agree robust trading terms with little fuss and only the cursory clerical management delivered through unskilled personnel in low-cost jurisdictions and, eventually, [[Chatbot|chatbots]].
 
It promised to be the long-lost missing [[Obsolescence|use-case]] for [[distributed ledger technology]], natively negotiated “[[Blockchain|on-chain]]” between arrays of dematerialised [[Large language model|large language models]] housed, for the sense of theatre, [[Proverbial school-leaver from Bucharest|in a single giant data centre in the outskirts of Bucharest]].
 
Had it been implemented, the Atlantis would have addressed the financial, infrastructural and regulatory challenges which would dog the financial derivatives market in the early 21st century, eventually bringing to the brink of an abyss the rolling countryside of [[Aïessdiyé|''Aïessdiyé'']], a verdant wetlands in whose folded hills, nooks and crannies peaceable, hobbity little [[First Men|swapsfolk]] had for generations made their comfortable burrows.
 
While they romped wealthily about their sun-drenched meadows, the ’08 would silently, effectively consolidate all documentation across a wide range of products and asset classes ([[Including but not limited to|including, but not limited to]], [[repo]], [[stock lending]], [[prime brokerage]], [[exchange traded derivatives]], [[commodities]] and [[emissions]]), finally moving the financial world into a stable [[Utopia|utopian state]] in which all risks are known, all eventualities experienced and contingencies accounted for. ''[[Risk]]'' would finally be banished for ever.


Oh, all right there ''isn’t'' a {{2008ma}}. Never was. This one ''is'' a  running [[JC]] in-joke. Talking to yourself might not be the first sign of madness, but having ''in-jokes'' with yourself might be. One day JC will write a novel about it. Swear to God.
That was the theory: the reality was infinitely darker.</blockquote>


====Schedule====
====Schedule====
All usable versions of the {{isdama}} have a Schedule with a semi-rigid structure. The first four parts contemplate making certain elections and representations, agreeing what financial disclosure each party should make and to whom, specifying names, addresses, contact details, agents, friends and relations, the last part is the “any other business” where your credit team can gild the lily and you can set out agreed amendments to the pre-printed form.
All usable versions of the {{isdama}} have a {{{{{1}}}|Schedule}} with a semi-rigid structure:
 
{{{{{1}}}|Part 1}}: '''{{{{{1}}}|Termination Provisions}}''' <br>
{{{{{1}}}|Part 2}}: '''{{{{{1}}}|Tax Representations}}''' <br>
{{{{{1}}}|Part 3}}: '''{{{{{1}}}|Documents for Delivery}}''' <br>
{{{{{1}}}|Part 4}}: '''{{{{{1}}}|Miscellaneous (Schedule)}}''' <br>
{{{{{1}}}|Part 5}}: '''{{{{{1}}}|Other Provisions}}''' <br>


A quick word on etiquette: one would ''never'' inline amend an ISDA Master Agreement — mostly they pass around the market in .pdf form, so you couldn’t anyway, but even if you could it would be unspeakably bad form to try — if you do want to make amendments to the legal or economic terms you put them in the Schedule. There are prudent [[legal design]] reasons for this, though over the years the amount of freestyle “Part 5” amendment has grown to the point where the Schedule is often longer than the Master Agreement proper. Much of this is quite unnecessary and, for lovers of clarity and documentary elegance, a cause for great regret.
The first four parts of the Schedule fine-tune various Events of Default and Termination Events, letting the parties make certain elections and representations, setting out their tax and financial disclosures and specifying names, addresses, contact details, agents, friends and relations and so on.
 
Part 5 is a free-form “any other business” where your credit team can indulge its fantasies, gild the lily and you can set out agreed amendments to the pre-printed form.
 
A quick word on etiquette: one would ''never'' inline amend an ISDA Master Agreement — mostly they pass around the market in .pdf form, so you couldn’t anyway, but even if you could it would be unspeakably bad form to try — if you do want to make amendments to the legal or economic terms you put them in the Schedule. There are prudent [[legal design]] reasons for this, though over the years the amount of freestyle “Part 5” amendment has grown to the point where the Schedule is often longer than the Master Agreement proper.  
 
Much of this is quite unnecessary and, for lovers of clarity and documentary elegance, a cause for great regret.
 
====Transactions ====
Because the range of things you could conceivably write a swap about is unlimited, and having only ten fingers and toes, [[Jolly Contrarian|JC]] will have less to say about “Transactions” generally — except for [[Equity Derivatives]], because they tend to be generic, [[delta-one]] and they are popular in the [[equity prime brokerage]] world, which is JC’s old stamping ground.


====Transactions====
Because the range of things you could conceivably write a swap about is literally unlimited, and having only ten fingers and toes, JC will have less to say about “Transactions” generally — except for [[Equity Derivatives]], because they tend to be generic, [[delta-one]] and they are popular in the equity prime brokerage world, which is JC’s old stamping ground.
====The I.S.D.A.====
====The I.S.D.A.====
ISDA, which publishes the ISDA, ''was'' the “International Swap Dealers Association''s'', Inc.” — interesting plural, that — but in any case, outwardly a ''[[sell-side]]'' industry association. Sometime between 1992 and 2002, it rebranded itself as the “International Swaps and Derivatives Association, Inc.”: singular, at the same time more unitary and more inclusive sounding, but still in spirit the same old ISDA, stake-held predominantly by the largest broker-dealers on the face of the Earth.  
{{drop|I|SDA, which publishes}} the ISDA, ''was'' the “International Swap Dealers Association''s'', Inc.” — interesting plural, that — but in any case, outwardly a ''[[sell-side]]'' industry association.


It may have aspirations to conquer the world — increasingly, it seems hell-bent on doing so, encroaching on the commodities, carbon, securities financing and crypto domains — but for now ISDA remains a “dealer-community” association, largely devoted to the swap.  
[[Jolly Contrarian|JC]]’s extensive research<ref>[https://www.google.com/search?q=%22International+Swap+Dealers+Associations%22+plural Let me Google that for you]. I know, right.</ref> has not yielded an explanation for why ISDA ever considered itself a plural, and the chatbots he consulted all came up with absurd reasons like — and I kid you not — inclusivity, collectivity, and global representation:
{{quote|“using Associations”, speculated [[NiGEL]], “might have aimed to convey a broader representation of various swap dealers across the globe, even though it wasn’t a merger of multiple entities”. Perhaps, it continues, “founders anticipated incorporating other regions or types of swap dealers in the future, which never materialised”.}}


These days the “buy-side lobby” is bigger, more organised and better represented than it used to be, with the following associations representing its interests:
Perhaps. Or maybe it was a typo. Who knows?
 
In any weather, in 1993, ISDA rebranded itself as the “International Swaps and Derivatives Association, Inc.”: singular, at the same time more unitary and sounding more inclusive of buy-siders, but still in spirit the same old ISDA, stake-held predominantly by the largest [[swap dealer]]s on the face of the Earth.
 
It may aspire to conquer the world — it encroaches on the commodities, carbon, securities financing and crypto domains — but for now, ISDA remains a “dealer-community” association, largely devoted to the swap.
 
====Buy-side representation====
{{drop|T|hese days the}} “buy-side lobby” is bigger, more organised and better represented than it used to be, with the following associations representing its interests:


{{plainlink|https://www.aima.org|AIMA|}} (the Alternative Investment Management Association)<br> {{plainlink|https://www.efama.org|EFAMA|}} (the European Fund and Asset Management Association) <br>
{{plainlink|https://www.aima.org|AIMA|}} (the Alternative Investment Management Association)<br> {{plainlink|https://www.efama.org|EFAMA|}} (the European Fund and Asset Management Association) <br>
The {{plainlink|https://www.managedfunds.org|MFA|}} (the Managed Funds Association) — not to be confused, by the way, with the Fund Management Association of Kenya — and<br>
The {{plainlink|https://www.managedfunds.org|MFA|}} (the Managed Funds Association) and<br>
The {{plainlink|https://www.theia.org|AI||}} (the Investment Association).
The {{plainlink|https://www.theia.org|AI||}} (the Investment Association).
<references />
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