Isda 2002 Master Agreement Template

The ISDA 2002 Master Agreement Template: An Overview

The International Swaps and Derivatives Association (ISDA) created the ISDA 2002 Master Agreement Template, which serves as the standard agreement for over-the-counter (OTC) derivatives transactions. The ISDA 2002 Master Agreement Template has been adopted globally and is widely recognized as the standard legal document for OTC derivatives trading.

The ISDA 2002 Master Agreement Template is a legal document that outlines the terms and conditions governing the relationship between two parties who engage in OTC derivatives transactions. The agreement establishes rules for the calculation and payment of cash flows, as well as terms for the transfer of collateral, termination events, and a variety of other considerations.

The ISDA 2002 Master Agreement Template consists of a set of standard terms and conditions that can be applied to any OTC derivatives transaction between two parties. The document is highly customizable, allowing market participants to tailor the agreement to their specific needs. The document comprises a series of schedules that can be used to specify transaction-specific details, such as the types of derivatives instruments involved, the credit support arrangements, and the termination events.

One of the unique features of the ISDA 2002 Master Agreement Template is the inclusion of credit support annexes (CSAs). CSAs are separate agreements that can be attached to the master agreement to set out collateral terms. These annexes establish the terms for the exchange of collateral between the parties to the transaction. The inclusion of CSAs is designed to mitigate counterparty credit risk by ensuring that both parties have adequate collateral to cover their respective obligations.

In conclusion, the ISDA 2002 Master Agreement Template is a widely recognized standard document for OTC derivatives trading. It provides a framework for the relationship between two parties, setting out terms for cash flows, collateral, termination events, and more. The document is customizable, allowing market participants to tailor the agreement to their specific needs. The inclusion of credit support annexes helps to mitigate counterparty credit risk. The ISDA 2002 Master Agreement Template remains a cornerstone of the OTC derivatives market and is a crucial tool for market participants.