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Close-Out Netting Isda Master Agreement

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. FDIA defines a swap agreement as an ISDA agreement and any underlying transaction. Although there may be hundreds of transactions under a single ISDA agreement, FDIA considers them an agreement. In accordance with this definition, the FDIC, when it opts for the transfer of an ISDA agreement, must also transfer all underlying transactions of the same ISDA agreement to the same purchaser. Not so long ago, the Ukrainian parliament finally successfully tried to implement the reform of derivatives in Ukraine. Work on the bill goes back more than a decade and includes several iterations in Parliament. It is not surprising that there have been many celebrations among participants and market participants. Warnings and press releases have been sent indicating that Ukrainian law is now well aware of the network and invites interested parties to take a closer look. This article is specifically intended to do so – take a closer look at how the new legal provisions relating to the closure of compensation will work in the specific context of the 2002 ISDA executive contract. 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. The “value of commitments” is in turn defined as the “monetary equivalent” of the commitments concerned.

Here too, for reasons of total clarity, a little more explanation would have been useful in the law itself. Nevertheless, we believe that the approach to loss (costs) and gains when replacing or obtaining an economic equivalent, as used in the definition of the amount of the close-out under the ISDA framework, should be covered. The provision of the Act, which gives the parties the freedom to define in the compensation agreement how they intend to determine the “value of obligations,” is a comfort in this regard. For the same reason, we believe that unpaid amounts should also be accounted for based on the legal “value of bonds.”

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