What is the ISDA Clause Library? · Clause Library Phase 1.3 ISDA Master Agreement Oct 2020...
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What is the ISDA Clause Library? www.isda.org ©2020 International Swaps and Derivatives Association, Inc. Standardization The ISDA Clause Library will introduce greater standardization in the way firms negotiate and agree terms in their contracts and how they categorize and manage legal agreement data. Benefits include: • Quicker and more efficient contract negotiation and client on-boarding; • More accurate and efficient regulatory and market-driven repapering exercises; • More consistent and accurate reporting of legal agreement data – for example, under qualified financial contract record-keeping requirements or as part of supervisory or prudential oversight rules. The ISDA Clause Library provides standard-form drafting options for commonly negotiated provisions within ISDA documents and the most common variants of those provisions. Increased standardization is a key component of ISDA’s strategy for developing enhanced legal documentation standards, delivering digitized documents through ISDA Create and facilitating further automation of derivatives products through the development of smart derivatives contracts. The ISDA Clause Library Unstructured Legal Agreement Data Clauses are Defined, Categorized and Standardized Structured Legal Agreement Data Clauses ISDA MA #1 ISDA MA01 V2 V4 V1 V3 V1 V3 V1 V1 V3 V4 V4 V2 V4 V1 V3 V3 V4 V2 V2 V1 ISDA MA02 ISDA MA03 ISDA MA04 ISDA MA #1 ISDA MA #1 ISDA MA #1 Termination Currency V1 V2 V3 V4 V1 V2 V3 V4 V1 V2 V3 V4 V1 V2 V3 V4 V1 V2 V3 V4 Automatic Early Termination Credit Event Upon Merger Payment Netting Set Off Clause Variants (By Business Outcome)
Transcript of What is the ISDA Clause Library? · Clause Library Phase 1.3 ISDA Master Agreement Oct 2020...
What is the ISDA Clause Library?
www.isda.org©2020 International Swaps and Derivatives Association, Inc.
StandardizationThe ISDA Clause Library will introduce greater standardization in the way firms negotiate and agree terms in their contracts and how they categorize and manage legal agreement data.
Benefits include:• Quicker and more efficient contract negotiation and client on-boarding;
• More accurate and efficient regulatory and market-driven repapering exercises;
• More consistent and accurate reporting of legal agreement data – for example, under qualified financial contract record-keeping requirements or as part of supervisory or prudential oversight rules.
The ISDA Clause Library provides standard-form drafting options for commonly negotiated provisions within ISDA documents and the most common variants of those provisions. Increased standardization is a key
component of ISDA’s strategy for developing enhanced legal documentation standards, delivering digitized documents through ISDA Create and facilitating further automation of derivatives products through the
development of smart derivatives contracts.
The ISDA Clause Library
Unstructured Legal Agreement Data Clauses are Defined, Categorized and Standardized Structured Legal Agreement Data
Clauses
ISDA MA #1 ISDA MA01V2
V4
V1
V3
V1
V3
V1
V1
V3
V4
V4
V2
V4
V1
V3
V3
V4
V2
V2
V1
ISDA MA02
ISDA MA03
ISDA MA04
ISDA MA #1
ISDA MA #1 ISDA MA #1
TerminationCurrency
V1 V2 V3 V4
V1 V2 V3 V4
V1 V2 V3 V4
V1 V2 V3 V4
V1 V2 V3 V4
Automatic EarlyTermination
Credit EventUpon Merger
PaymentNetting
Set Off
Clause Variants(By Business Outcome)
www.isda.orgISDA® is a registered trademark of the International Swaps and Derivatives Association, Inc.
Applications
EfficientNegotiation and
On-boarding
LegalAgreement
DataManagement
SmartDerivativesContracts
Regulatory /Market ChangeManagement
RegulatoryReporting
AligningBusinessProcessesThroughthe CDM
AI andNatural
LanguageProcessing
Tools
Progress and Status
Phase 2Phase 1.1
Oct 2018 to Jan 2019Initial 5 clauses
analyzed
ISDA MasterAgreement
Phase 1.2
Feb to May 2019Further 11 clauses
analyzed
ISDA MasterAgreement
Sep 2019 to April 2020Material completion ofISDA Master Agreement
Clause Library
Phase 1.3
ISDA MasterAgreement
Oct 2020Material completion
of ISDA VM CSA Clause Library
VM CSAs
Jan 2020Work commenced
on ISDA VM CSA Clause Library
VM CSAs
42Clauses
~250Unique Data
Points
134ClauseVariants
Delivery
>3,000
AgreementsReviewed
>50,000
Clause SamplesAnalyzed
>100 Member
SamplesProvided
Development
DigitizationGreater standardization creates opportunities to optimize and automate business processes through the digitization of documentation.
Benefits include:• Creation of an industry standard framework for
categorizing and managing legal agreement data;
• Integration with the ISDA Common Domain Model (CDM). This will provide greater alignment with systems and processes designed to monitor important business and operational functions deriving from legal contracts, including netting and collateral enforceability, liquidity and counterparty credit risk;
• Digitization of legal documentation and the development and application of new technologies such as distributed ledger, smart contracts and artificial intelligence to derivatives documentation and products.
CoverageThe ISDA Clause Library currently covers the 1992 and 2002 versions of the ISDA Master Agreement under English, New York, Irish and French law.
The ISDA Clause Library is being expanded to cover various variation margin credit support annexes under English, New York, Irish, French and Japanese law.
The ISDA Clause Library will be updated and maintained to reflect evolving market, legal and documentation practices.
Contact:Join the ISDA Legal Technology Working Group.
Email: [email protected]
