The framework agreement is a document agreed between two parties, which establishes standard conditions applicable to all transactions between the parties. Whenever an operation is executed, the terms of the master contract should not be renegotiated and applied automatically. Section 6 of the ISDA Master Agreement contains provisions allowing a public holiday to interrupt operation prematurely in the event of an event of default or default vis-à-vis the counterparty, as well as the determination of the calculation method and less the termination values for the production of a single amount to be paid between the parties. The MASTER ISDA agreement is the most widely used mastery contract for OTC derivatives transactions at the international level. It is part of a documentary framework that allows OTC derivatives to be documented in a comprehensive and flexible way. Il quadro si compone di un accordo quadro, una pianificazione, conferme, libretti di definizione, e la documentazione sostegno al credito. Contrat-cadre è pubblicato dalla Swaps and Derivatives Association. The framework agreement allows the parties to calculate their financial risk from OTC transactions on a net basis, i.e. a party calculates the difference between what it owes to a counterparty under a framework agreement and what the counterparty owes it under the same agreement.
Sezione 5 dell`accordo ISDA master contiene le « Events of Default » e « Termination Events ». Si tratta di eventi che possono portare alla cessazione delle transazioni prima della loro prevista durata. The framework contract is quite long and the negotiation process can be laborious, but once a framework contract is signed, the documentation of future transactions between the parties will be reduced to a brief confirmation of the essential terms of the transaction. Together with the schedule, the framework contract sets out all the general conditions necessary for the proper allocation of the risks of the transactions between the parties, but does not contain conditions specific to a given transaction. Once the framework agreement has been concluded, the parties can conclude many transactions by granting the main terms of sale by telephone, as evidenced by written confirmation, without the need to review the underlying terms of the framework agreement. The ISDA Master Agreement, published by the International Swaps and Derivatives Association, is the most widely used master service agreement for OTC derivatives trading internationally. It is part of a documentary framework designed to enable comprehensive and flexible documentation of OTC derivatives. The framework consists of a framework contract, a timetable, confirmations, definition brochures and credit support documentation. The framework contract is the central document around which the rest of ISDA`s documentary structure is built. The pre-printed framework contract is never modified, except to insert the names of the parties, but is adapted to the framework agreement through the use of the calendar, a document containing elections, additions and amendments to the framework agreement. In 1987, ISDA prepared three documents: (i) a standard form framework contract for interest rate swaps in United States dollars; (ii) a standard framework contract for interest rate and currency swaps denominated in several currencies (collectively referred to as the `1987 ISDA framework contract`); and (iii) definitions of interest rates and currencies.
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