Wednesday 01 February 2023
Over the years DDL has taken many calls from new entrants in the market who have received an ISDA Master Agreement and have no idea what it is or who ISDA is. So last month we wrote a blog on what an ISDA Master Agreement is and this month we unveil who ISDA is.
The International Swaps and Derivatives Association, Inc. (“ISDA”) was formed in New York in 1985 and now has over 1000 members in 79 countries. Its mission is to standardise market practice and documentation for over-the-counter (“OTC”) derivatives. In this it has been a resounding success because before ISDA there was no standard documentation in the market.
With complex Transactions that wide variety of documentation caused legal uncertainty and led ISDA members to compose a number of Master Agreements over the past 35 years notably the 1992 and 2002 ISDA Master Agreements. Both of these are used in the market.
ISDA has also published a number of Credit Support Annexes dealing with collateralising OTC derivatives transactions typically with high quality government bonds and/or cash.
They have also published comprehensive Definitions covering many product types including credit derivatives and equity derivatives. These Definitions are used in the composition of Confirmations which set out the terms for individual trades between counterparties.
DDL provides online training on ISDA documentation. Please visit the Online Training section of our website for further details.
ISDA® is a registered trademark. Please be advised that ISDA® documentation online training provided by Derivatives Documentation Limited is not sponsored by or affiliated with ISDA.
Posted by Paul Harding