Negotiating Skills for the ISDA Master Agreement The Essential Playbook for Over-the-Counter Derivatives

by Bender, Seth Phillip, Esq.

• ISBN13: 9780132099639
• ISBN10: 0132099632
• Edition: 1st
• Format: Hardcover
• Copyright: 2011-02-01
• Publisher: FT Press

Summary

If you negotiate OTC derivatives using the ISDA Master Agreement and Credit Support Annexes, this practical guide will help you protect your interests. Seth Phillip Bender identifies key provisions you can actually change; provides drafting recommendations, language suggestions, and operational tips; and helps you take advantage of ISDArs"s latest initiatives.

Author Biography

Seth P. Bender, Esq., is a graduate of Washington University in St. Louis, and attended law school at the Fordham University School of Law in New York City. He began his career in the Capital Markets practice at the law firm Cadwalader, Wickersham & Taft LLP. Since that time, he has consulted at some of the largest New York buy- and sell-side institutions negotiating new trading documentation and renegotiating preexisting agreements to account for the changes in today’s volatile markets. His experience at investment managers and dealers has provided him with a diverse forum to examine the varying issues applicable to each of these constituents during market swings, and has provided him with a greater understanding of both sides of a trading relationship, the terms generally accepted in the marketplace by dealers, and the inefficiencies created in the negotiation process--knowledge that he believes can streamline the negotiation phase of the ISDA Master Agreement for many industry participants.

Table of Contents

Foreword	p. xi
Structure of This Playbook	p. 1
Important Note on Playbook Structure	p. 5
Framework of the ISDA Master Agreement	p. 7
What Is the ISDA Master Agreement?	p. 7
Why Enter into an ISDA Master Agreement?	p. 9
Introduction to the Schedule to the ISDA Master Agreement	p. 12
The Dealer's Onboarding Process	p. 14
Selected Readings	p. 16
Negotiating the Schedule to the ISDA Master Agreement	p. 17
Important Contextual Information to a Negotiation: The Fund Is the Riskier Party	p. 17
Schedule's Heading	p. 19
Termination Provisions	p. 20
Tax Representations	p. 65
Agreement to Deliver Documents	p. 66
Miscellaneous	p. 70
Other Provisions	p. 84
FX Transactions and Currency Options	p. 93
Selected Readings	p. 95
Introduction to the Credit Support Annex	p. 97
Why the Credit Support Annex Is Used	p. 97
Forms of Credit Support Annexes	p. 99
Basic Mechanics of the Credit Support Annex	p. 100
Introduction to the Paragraph 13 of the 1094 ISDA Credit Support Annex	p. 102
Selected Readings	p. 103
Negotiating the Paragraph 13 to the 1994 ISDA Credit Support Annex	p. 105
Important Contextual Information to a Negotiation	p. 105
Paragraph 13. Elections and Variables	p. 107
Selected Readings	p. 132
New ISDA Initiatives	p. 133
Adhering to Protocols	p. 133
ISDA Protocols to Facilitate Central Clearing	p. 134
Initiatives in Response to Market Volatility-Close-out Amount Protocol and 2009 Collateral Dispute Resolution Procedure	p. 140
Selected Readings	p. 143
Sample Schedule to the 1992 ISDA Master Agreement	p. 145
Termination Provisions	p. 145
Tax Representations	p. 148
Agreement to Deliver Documents	p. 148
Miscellaneous	p. 150
Other Provisions	p. 152
FX Transactions and Currency Options	p. 156
Sample Paragraph 13 to the 1994 ISDA Credit Support Annex	p. 159
Summary of Suggested Provisions	p. 165
Selected Terms	p. 177
Preprinted 1992 ISDA Master Agreement	p. 181
Preprinted 2002 ISDA Master Agreement	p. 207
Preprinted 1994 ISDA Credit Support Annex	p. 245
Index	p. 261
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