2005 Isda Master Give up Agreement

The 2005 ISDA Master Give Up Agreement: Understanding its Purpose and Key Provisions

The 2005 ISDA Master Give Up Agreement is an essential document in the world of finance. It is a standard form agreement provided by the International Swaps and Derivatives Association (ISDA) that sets out the terms and conditions between a prime broker and a executing broker when executing trades on behalf of a client.

What is the Purpose of the Agreement?

The primary purpose of the 2005 ISDA Master Give Up Agreement is to facilitate the transfer of a client’s trades from one broker to another. This type of transfer is known as a give-up. It is essential when a client wants to use multiple brokers for executing trades or when a broker handles orders on behalf of another broker.

The agreement helps ensure that the executing broker receives payment for executing the trade, and the prime broker receives payment for providing clearing services to the executing broker. It also clarifies the roles and responsibilities of the parties involved in the trade, which helps minimize disputes and misunderstandings.

Key Provisions of the Agreement

The 2005 ISDA Master Give Up Agreement contains several important provisions that dictate how the parties involved in a give-up will work together. Here are some of the key provisions:

1. Defined Terms: The agreement includes defined terms that are used throughout the document. These terms help ensure that the parties understand the meaning of critical terms used in the document.

2. Trade Confirmation: The executing broker must send a trade confirmation to the prime broker once a trade has been executed. The confirmation should include all relevant details about the trade, such as the asset type, trade date, settlement date, and price.

3. Payment and Settlement: The agreement includes provisions for payment and settlement between the parties. It specifies how the executing broker will be paid for executing the trade and how the prime broker will be paid for clearing and settling the trade. It also includes provisions for how disputes related to payment and settlement will be resolved.

4. Termination: The agreement includes provisions for termination, which specify the circumstances under which the agreement can be terminated and the notice periods required.

5. Governing Law: The agreement specifies which jurisdiction’s laws will apply to the agreement and any disputes that arise from it.

In conclusion, the 2005 ISDA Master Give Up Agreement is an essential document in the world of finance. It facilitates the transfer of a client’s trades from one broker to another, helps clarify the roles and responsibilities of the parties involved, and helps minimize disputes and misunderstandings. If you work in a role that involves executing trades on behalf of clients, it is essential to understand this agreement and its key provisions.