The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:
It is important that the Master Agreement correctly identifies the party with whom Transactions will be entered into:
in complex corporate organisations it is easy to mistake similarly named entities;
the entity named must be in an acceptable jurisdiction and have the requisite authorities and regulatory approvals to transact;
the name of the party to the Master Agreement must match that on any existing Transactions which it is intended to govern
Where the counterparty is an entity in a different jurisdiction, legal due diligence on that party is required, using the ISDA netting legal opinions as a starting point (see Practice Note: ISDA netting legal opinions), to ensure that the contract being agreed is fully enforceable in that jurisdiction.
Common practice in the derivatives markets is for the entry into Transactions to be made ahead of the execution of a Master Agreement. As such, the Master Agreement which intends to capture all outstanding transactions needs to use the ‘as of’ provision in the title. This allows the agreement to effectively be back-dated to cover any transactions that may be entered into before the Master Agreement is signed. The Schedule accordingly needs to be dated as of the same date as the Master Agreement.
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