What is surprising is that the structure of the 2002 calendar is very similar to that of the 1992 agreement, with the exception of Part 4 (k) (n), and that even the issues dealt with there are not “missile sciences”. On 27 November 2001, the International Swaps and Derivatives Association distributed to its members the first draft of a new version of the ISDA Framework Agreement (the 2002 Agreement). Among the elements of the 2002 agreement, most of the comments from market participants focus on three points: – the 2002 agreement is increasingly used with structured transactions, but only if the company`s counterparty or its external consultant so requires. Over the past 18 months, ISDA has attempted to promote the use of the 2002 agreement in the following ways: in 2003, for example, the market had to introduce both the 2002 ISDA definitions for equity derivatives and the 2003 ISDA definitions for ISDA credit derivatives, which together took up a lot of management time in the first half of this year. Since then, the pressure of daily work has, in many cases, delayed the implementation of the 2002 agreement. * There are supporters and opponents of the shorter grace periods of the 2002 agreement, the measure of payment of the final amount and the determination of force majeure events. These important issues will, of course, be resolved through possible negotiations on the 2002 agreement. Given the time and effort he put into drafting the 2002 agreement, why is that the case? Beyond the disasters, I expect that the 2002 agreement will be the exceptional ISDA framework agreement that will be in place in the next two years. Demand for the 2002 agreement is low. The major banks have generally set their timetables for 2002, but only welcome them at the request of the counterparty.

The institutions which, in 1993/94, vigorously advanced the 1992 agreement and had to wait many months before being completed, are more inclined to react. Many are waiting for the big banks to obtain the authorizations of the political committees for the introduction of the 2002 agreement before sending them their calendars for 2002 or considering their own. The Protocol provided operators with an effective multilateral method to amend 13 GDR definition brochures and five credit support documents to take account of the new terminology and provisions of the 2002 Agreement. In essence, those documents dating from before 2002, which were not drafted in the run-up to the 2002 agreement, were updated and contractual concepts were not included in 2002, such as market quotation and loss. 5. 2002 Framework Protocol and bilateral forms of amendment ………. 3 6. Implementation and use of the 2002 architecture … 4 Disaffection/suspicion of the provisions of the 2002 agreement * The market has a general attitude of “expectation” or “After you” attitude. I believe that more large banks need to adopt the 2002 agreement more vigorously if it is to be successful. There is a tendency to withdraw at the slightest objection from the counterparty to the 1992 agreement and some counterparties have avoided using the 2002 agreement so as not to disrupt their existing ISDA credit support schemes, although assistance is available here on forms of modification of ISDA loans under English and New York laws. .

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