2002 Master Agreement Protocol 15 July 2003

The Protocol does not provide for any modification of confirmations based on one of ISDA`s long-form confirmation models, as these confirmations do not only contain standard sets of definitions and provisions, but are consistent in themselves and are more likely to vary the types of provisions that lead to the problems addressed in the Protocol than confirmations based on ISDA confirmation models. However, parties using such confirmations under a 2002 framework agreement will want to ask questions similar to those addressed in the annexes to the protocol. Paragraphs 7 (b) (v) (B) and (C) refer, for example, to market quotation and loss, in the form of the ISDA “Confirmation of Credit Swap Transaction Single Reference Entity Non-Sovereign”. How can I verify the signing authority of other supporters of the 2002 Framework Protocol? The 2002 Framework Agreement is expected to become the standard framework agreement used by participants in international OTC derivatives markets. Until the association updates its entire documentary library, the parties to the 2002 framework contracts will intend to use certain documents dating from before 2002 in connection with such agreements. In this context, market participants that have not yet decided to conclude a 2002 framework agreement should consider signing the protocol. The protocol was open to ISDA members and non-members who did not need to conclude a 2002 agreement to accede to it. The decisions taken in the annex letter will take effect if the Contracting Parties implement a 2002 agreement in the future, even after the end of the Protocol on 1 June (after a three-month extension by ISDA). 287 market participants have complied with the Protocol. Finally, many members of the documentation need to be re-educated in the 2002 agreement.

Some received training or seminars 18 months or more ago in anticipation of faster implementation of the 2002 agreement in the market. Can I amend the text of the 2002 Framework Protocol or the substantive clauses? Operators (“Parties”) announce their participation in the Protocol Agreement by sending a letter (a letter of adhesion) to the ISDA office in New York or London. The letter of adherence allows the Contracting Party to indicate which of the eighteen annexes containing standardised amendments wishes to apply it to the 2002 framework contracts concluded with other contracting parties. Introduction and overview of the 2002 Framework Protocol Any legal entity that has either concluded a 2002 Framework Agreement or expects it to be able to conclude a Framework Agreement in the future must comply separately in its own capacity if it wishes to follow the Protocol. The Protocol does not provide for compliance by a separate group of legal persons. Does ISDA provide legal advice accompanying the 2002 Framework Protocol? Some counterparties have avoided using the 2002 agreement so as not to disrupt their existing ISDA credit support formulas, although they support the ISDA Credit Support amendment formulas ancillary to English and New York law in English and New York. If I sign the protocol, does it cover all transactions relating to the pre-2002 definitions that I was cashing out under a 2002 framework agreement, as well as all credit assistance agreements under a 2002 framework agreement? At the time, ISDA expected that the 2002 agreement would soon be taken over by North American institutions for new counterparts, but that progress in Europe and Asia would be slower. . . .

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