On July 8 2011, the International Swaps and Derivatives
Association (Isda) published the 2011 Isda Equity Derivatives
Definitions (the 2011s) – the first results of an
18-month process to expand, update and standardise the terms
used to document these transactions. The process was initiated
both to meet bank supervisor mandates and to incorporate
lessons learned during the financial crisis.
It's been almost a decade since Isda last published equity
derivatives definitions in 2002 (the 2002s). Since then, Isda
had published close to 50 product-specific additional
contractual term annexes.
The 2002s were widely used as a base document, but also
widely amended both in Isda published equity documentation and
in bilateral bespoke documentation. This occurred for a variety
of reasons, but at its heart the reason was that the 2002s were
limited in scope as far as product features and risk allocation
provisions and were thought of as a starting place only...