Negotiating Skills for the ISDA Master Agreement: The Essential Playbook for Over-the-Counter Derivatives
“The book does a fantastic job of distilling commonly accepted fallback provisions and effective negotiating strategies into a quick and easy guide for seamlessly establishing over-the-counter derivative trading relationships with broker-dealers. With this book, a practitioner can cut through lengthy negotiations armed with legal provisions that have become standard in the marketplace.”--Christian Pugaczewski, Attorney “This is a great, practical guide for professionals and attorneys in the OTC derivatives industry. If you are interested in adequately protecting your interests under the ISDA Master Agreement, this book is a must-read.”--Seth M. Zaben, Attorney Practical ISDA negotiation guidance focusing on the negotiable areas of the 1992 and 2002 ISDA Master AgreementIncludes drafting recommendations, language suggestions, and operational tipsTailored for hedge and other investment funds, many of the negotiable areas, recommendations, language suggestions, and operational tips in this playbook are relevant to all users of the ISDA Master AgreementIncludes the 1992 ISDA Master Agreement, 2002 ISDA Master Agreement, and 1994 ISDA Credit Support Annex as appendices for quick reference This is the first no-nonsense, start-to-finish roadmap for protecting your interests in the negotiation of the ISDA Master Agreement. Drawing on a wealth of ISDA experience in the trenches, Seth P. Bender, Esq., distills today’s most effective negotiating strategies into a quick and easy guide for establishing OTC derivative trading relationships. Bender helps you identify onerous provisions you can confidently decline, as well as revisions to the Schedule and Paragraph 13 that provide crucial, additional protection and are widely accepted by dealers. Replete with easy-to-follow examples, drafting recommendations, and language suggestions, this playbook will help you identify industry “soft spots” and take advantage of them. Even if you’re new to negotiating the ISDA Master Agreement, it will help you level the playing field–executing more efficient, favorable contracts with fewer dealer termination rights. Increasingly, institutions that transact over-the-counter (OTC) derivatives rely on the International Swaps and Derivatives Association, Inc.’s (ISDA) Master Agreement. However, many financial professionals find themselves disadvantaged when negotiating with dealer counterparties due to the complexity of the agreement. Negotiating Skills for the ISDAMaster Agreementwill help these professionals level the playing field. This is the first complete, practical guide to successfully negotiating the ISDA Master Agreement and its associated Credit Support Annex. OTC derivatives attorney Seth P. Bender clarifies what dealers will and won’t concede, helping readers focus on the issues and provisions they can actually change. Bender clearly introduces the ISDA Master Agreement’s documentation architecture, provides drafting recommendations and language suggestions, and offers specific operational tips related to the Credit Support Annex and the collaterization of exposure. He also devotes a full chapter to recent ISDA initiatives. Whatever your role in negotiating OTC derivative transactions governed under the terms of an ISDA Master Agreement, this book will help you protect your interests--fairly, efficiently, and consistently. Cut through lengthy negotiations and get the results you needArm yourself with Schedule and Paragraph 13 improvements that dealers typically acceptUse the ISDA Master Agreement to minimize counterparty credit risksReduce dealers’ ability to unexpectedly terminate existing contractsUnderstand the ISDA’s recent initiativesSpecifically the “Close-out Amount,” “Big-Bang,” and “Small-Bang” ProtocolsUse the Credit Support Annex to collateralize your OTC derivative transactionsUnderstand the Credit Support Annex and how to negotiate it