2002 Master Agreement Protocol Published by the International Swaps and Derivatives Association Inc

Is the Protocol to the 2002 Framework Agreement linked in any way to the previous ISDA Protocols (e.B.dem EMU Protocol)? Prior to the publication of the 2002 agreement, ISDA published a number of brochures and definitional documents in support of loans. These documents refer to the terminology and provisions of the 1992 ISDA Framework Agreements. The Protocol allows for the amendment of these various documents to take account of the new terminology and provisions of the 2002 Agreement. If an institution were to amend all relevant contracts to adopt these standard changes, it would entail a significant expenditure of time and money if it were to be conducted in bilateral negotiations between all counterparties. ISDA therefore supports a multilateral mechanism for change – the Protocol. Market participants (“Subscribing Parties”) declare their participation in the Memorandum of Understanding by sending a letter (a “Letter of Accession”) to ISDA`s office in New York or London. The letter of accession allows the acceding Party to indicate which of the eighteen annexes with standardized amendments it intends to apply with respect to the 2002 framework agreements with other parties. The process of change and membership is defined, among other things, in the protocol itself, which is published on the association`s website (www.isda.org) with a form of membership letter. For more information about the compliance process, see the Protocol Mechanisms section of this FAQ.

Is ISDA preparing legal advice accompanying the Protocol to the 2002 Framework Agreement? If I sign the protocol, does it cover all transactions relating to pre-2002 definitions that I enter into under a 2002 framework agreement, as well as all credit support agreements related to a 2002 framework agreement? The Association has prepared a standard official letter to assist Parties wishing to encourage others to sign the Protocol. Given that the Protocol is forward-looking, subscribing Parties may even consider encouraging market participants with whom they do not currently have a derivatives trading relationship to comply. (Form of the matching letter) The membership period is limited to give the adherent parties (as well as the association) a certain degree of security and purpose. The limited accession period should also encourage market participants to address the issues addressed in the Protocol as soon as possible, thereby promoting the proper functioning and efficiency of OTC derivatives markets. Since the Protocol is forward-looking and allows an acceding Party to deal with issues at any time in the future, including with regard to the 2002 Framework Agreements it has concluded with other acceding Parties, it is not necessary to keep the accession period open indefinitely. The protocol does not provide for changes to confirmations based on one of ISDA`s long confirmation models, as these confirmations not only contain standard sets of definitions and provisions, but are self-contained and vary the types of provisions that lead to the problems addressed in the protocol rather than confirmations based on ISDA`s abbreviated confirmation templates. However, Parties using such confirmations under a 2002 Framework Agreement may wish to consider issues similar to those addressed in the Annexes to the Protocol. For example, paragraphs 7 (b) (v) (B) and (C) of the long FORM ISDA “Confirmation of the OTC credit swap transaction a single non-sovereign reference entity” refer to the quotation and loss of the market.

No. The Protocol is intended to cover the 2002 Framework Agreements, irrespective of the applicable law of the Agreement. However, parties to a 2002 framework agreement governed by legislation other than English or New York law will wish to consider whether there is legal support for the applicability of the Protocol when used in connection with 2002 framework agreements subject to those laws. Why should I consider participating in the 2002 Framework Agreement Protocol? Can only contracts under English and New York law fall under the 2002 ISDA Framework Agreement Protocol? Do I need to have a 2002 Framework Agreement before I can participate in the 2002 Framework Agreement Protocol? In submitting the Letter of Accession, the Acceding Party agrees that the provisions of each selected Annex shall apply to any 2002 Framework Agreement with another Acceding Party if or to the extent that its choice of such Annex is consistent with that contained in the Letter of Accession submitted by the other Party. A signed copy and an adapted copy of a letter of compliance must be received in order for ISDA to register as a party a party that has acceded to the Protocol to the 2002 Framework Agreement. The personalized copy is required for publication of the letter on the ISDA website, as members have concerns about posting signatures on the Internet. Do the acceding parties have to accept all the provisions of the Protocol to the 2002 Framework Agreement? Of course, trading partners can negotiate bilaterally and accept changes outside the scope of the Protocol. The Protocol in no way impedes freedom of contract, whether or not the Parties have acceded to it.

If Parties to a 2002 Framework Agreement wish to amend the provisions of the Protocol, as they would otherwise apply, for example, to a transaction containing a specific Isda definition brochure, section 5 (b) of the Protocol describes how they should do so. How do I know who has acceded to the Protocol to the 2002 Framework Agreement? No. Participation in the Protocol is not limited to market participants who have already concluded a framework agreement in 2002. The Protocol has been specifically designed to be open to any market participant that has concluded or could conclude a 2002 framework agreement. It is forward-looking in so far as the provisions of the Protocol agreed between them apply to their relations under that 2002 Framework Agreement where two acceding Parties conclude a 2002 Framework Agreement. No. The Protocol concerns only agreements in the form of the 2002 Framework Agreement. It does not affect agreements in any form other than the 2002 Framework Agreement. For example, it does not affect existing 1992 framework agreements (or transactions governed now or in the future by that 1992 framework agreement or other related credit support provisions) or future 1992 framework agreements.

Maybe not, even if you select all the attachments in your membership letter, for at least three reasons. Firstly, in 2002 you will be able to conclude framework agreements with parties who do not comply with the protocol. Second, the annexes chosen by one acceding Party shall apply only in respect of another acceding Party, to the extent that the choice of the parties corresponds. Third, you may be documenting a transaction using one of ISDA`s older detailed confirmation templates (which are not covered by the protocol). However, if both parties choose all annexes in their letters of accession, the protocol may cover any document published by ISDA before 2002 that the parties actually wish to use under a 2002 framework agreement. No additional documents are required to comply with the Protocol to the 2002 Framework Agreement. Supporting documents, such as board resolutions or a list of authorized signatures, may be provided and will be retained by ISDA, but it is not necessary to submit such documents to comply with the protocol. Access to supporting documents is granted only in special circumstances. How can I encourage a counterpart to accede to the Protocol to the 2002 Framework Agreement? The following documents must be submitted to the ISDA office in New York or London to comply with the Protocol to the 2002 Framework Agreement: The Protocol reflects an innovative procedure for considering various standardized changes to one or more documents from the pre-2002 period as having been made when these documents are used under a 2002 Framework Agreement.

It is based on the principle that the parties may agree with one or more other parties that certain terms and conditions apply now and/or in the future to their respective relationships (unless they expressly agree otherwise). For similar reasons, the protocol does not provide for changes to THE STANDARD ISDA “Bridges” forms. Parties wishing to use some form of ISDA bridge will need to negotiate and reach agreement on a number of issues, and the final form of the transition provision will likely be carefully tailored to their individual relationship. One of the issues that the parties should consider before using the 2001 Inter-Agreement Bridge or the 2002 Global Energy Bridge with a 2002 Framework Agreement is that these bridges contain references to other forms of the ISDA Framework Agreement and do not refer to the final amount method in the 2002 Framework Agreement. .