The mastery agreement is the central document around which the rest of the ISDA documentation structure is cultivated. The pre-printed framework contract is never amended, with the exception of the addition of the names of the parties, but is adapted to the master agreement by the use of the calendar, a document containing options, additions and changes to the framework contract. An ISDA master contract is the standard document that is regularly used to regulate over-the-counter derivatives transactions. The agreement, published by the International Swaps and Derivatives Association (ISDA), outlines the conditions to be applied to a derivatives transaction between two parties, usually to a derivatives trader and counterparty. The master contract of the ISDA itself is the norm, but it is accompanied by a bespoke timetable and sometimes an annex to support the credit, both signed by both parties in a given transaction. The parties try to limit this responsibility by including „unconfident“ representations in their agreements, so that each party does not rely on the other and makes its own independent decisions. While these submissions are helpful, they would not prevent business practices or other measures if a party`s conduct was inconsistent with that presentation. The main advantages of an ISDA management contract are improved transparency and liquidity. As the agreement is standardized, all parties can study the ISDA master agreement to find out how it works. This improves transparency by reducing the possibility of opacity of leakage provisions and clauses. Standardization by an ISDA executive contract also increases liquidity, as the agreement makes it easier for parties to make repeat transactions.
Clarifying the terms of such an agreement saves all parties time and legal fees. Given that the ISDA`s governing contract would likely be governed by English, New York or, more recently, French law, the question arises as to whether a foreign contract setting out conditions of close compensation is recognized from the point of view of Ukrainian law. The answer is yes – there is nothing in Ukrainian rules on the narrowness of networks that would prevent foreign law through network agreements. The ISDA Masteragrement, published by the International Swaps and Derivatives Association, is the most widely used master service contract for otC derivatives transactions internationally. It is part of a documentary framework that aims to provide comprehensive and flexible documentation on OVER-the-counter derivatives. The framework consists of a master contract, a calendar, confirmations, definition brochures and credit support documentation. At the same time as the timetable, the framework agreement defines all the general conditions necessary for the proper distribution of the risks of transactions between the parties, but does not contain specific terms and conditions for a particular transaction. Once the framework agreement has been concluded, the parties can enter into numerous transactions by agreeing to the essential terms and conditions over the telephone, as confirmed in writing, without the need to re-consider the terms of the framework agreement. First, the party that decides.
Ukrainian law states that a compensation agreement should relate to a „person who is responsible for the execution of the compensation.“ Although the text of the legislation could have been clearer, there is, in our view, nothing to prevent the application of the provisions of the ISDA master contract, which would make calculations of the amount of the close-out (including whether it is two parties involved or even an agent of a deciding party). Then there is a question of determination itself. For the purposes of calculating the final amount, the Act uses the concept of a party`s „bond value“ in a derivatives transaction, and follows the statement that the method of determining that value should be defined by the clearing agreement.
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