Table of Contents
What is ISDA negotiation?
The ISDA Master Agreement is an umbrella agreement which sets out the overarching terms between the parties who want to trade OTC derivatives. In addition to the standard Master Agreement text, there is a Schedule which allows parties to add to or amend the standard terms. The Schedule is what negotiators negotiate.
What are the four parts of ISDA?
The framework consists of a master agreement, a schedule, confirmations, definition booklets, and credit support documentation. The master agreement is a document agreed to between two parties that sets out standard terms that apply to all the transactions entered into between those parties.
What is CSA threshold?
Threshold amount (TH): It is the level of unsecured exposure each counterparty will allow the other before any margin call is made. Minimum Transfer Amount (MTA): The minimum amount that can be transferred for any margin call. The amount is specified in the margining agreement.
What is included in an ISDA?
Created in 1985, the ISDA has members from institutions around the world. These member institutions include participants in all levels of the derivatives market, spanning everyone from commodity companies, law firms, and investment managers to international banks, derivatives exchanges, and clearinghouses.
How does a CSA work ISDA?
A Credit Support Annex, or CSA, is a legal document which regulates credit support (collateral) for derivative transactions. The Credit Support Amount is the Secured Party’s Exposure plus Pledgor’s Independent Amounts minus Secured Party’s Independent Amounts minus the Pledgor’s Threshold.
What is a CSA in ISDA?
A credit support annex (CSA) is a document that defines the terms for the provision of collateral by the parties in derivatives transactions. It is one of four parts of a standard contract or master agreement developed by the International Swaps and Derivatives Association (ISDA).